MISO – CRSTT: Zone 4 Capacity Market Design
Non-Jurisdictional Entities’ Perspective
Hoosier Energy, Southern Illinois Power Cooperative,
Prairie Power, Inc. and Wabash Valley Power Association.
March 7, 2016
MISO Zone 4 Capacity Market:
Summary
Zone 4: Scope of proposed PRA changes is expansive
• Exelon: The overarching principal of Exelon’s Southern IL
(Zone 4) solution is to adapt PJM’s Reliability Pricing
Model (RPM) to Zone 4, while integrating with the rest of
MISO as seamlessly as possible.
• Dynegy: Separate Forward Competitive Auctions (FCA)
will be administered by MISO in Q1 of 2017 for each of
the next four planning years (2017-18, 2018-19, 2019-20
and 2020-21) where 100% of the PRMR for each planning
year will be procured.
• Other proposals to change the Zone 4 Capacity market
design are on the Agenda for Today’s CRSTT.
Sources: February 22, 2016 CRSTT; Exelon, Dynegy presentations at Slide 1, page 1,
respectively.
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Design Components PF.1/PF.2:
Options to Demonstrate RA
• Existing market design recognizes that not all generating
resources rely on market revenues to ensure Resource
Adequacy (RA).
• Zone 4 electric cooperatives’ business model centers around
the provision of adequate generating capacity and long-term
RA for cooperative’s Member load at a reasonable cost.
• In other words, Zone 4 electric cooperatives are similar to LSEs
in other MISO zones outside of Zone 4.
• The current Market Design allows LSEs to meet their
Planning Reserve Margin Requirement (PRMR) via a Fixed
Resource Adequacy Plan (FRAP) (see, e.g., BPM 11, Sect.
5.3). Excess capacity is sold bilaterally or into the auction.
• This Market Design feature must be maintained.
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Design Components
PF.2.3/PF.2.4: MOPR
• Cooperatives Oppose a MOPR for both new entry and
existing MISO resources:
– Changing the Zone 4 Market Design is a significant
change; adding a MOPR for new entry/existing supply
would be a significant shock to Zone 4 consumers.
– There is no evidence that buyer-side market power
exists in MISO Zone 4, or that a MOPR is needed to
ensure RA or address “missing money” for Zone 4
generating resources.
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Design Components: Electric
Cooperatives’ Perspective
Zone 4 Market
Design Element
PF.1/PF.2
Options for load
to demonstrate
resource
adequacy.
PF.2.3/PF.2.4
Buyer-side
Mitigation: MOPR
– New & Existing
Resources
PRA Status
Quo
Dynegy
Exelon
(2/22/16 CRSTT)
(2/22/16 CRSTT)
Electric
Cooperatives
Voluntary
Voluntary, but
overly restrictive.
Mandatory
(“FRAP option
removed”)
Participation
must remain
Voluntary
No selloffer floor
for new
entry or
existing
resources
Yes;
(“All capacity
supply offers will
be subject to
[MOPR]…used to
establish an offer
floor for all
Planning
Resources”)
No details
No Sell-offer
floor for New
or Existing
resources is
required
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