Stakeholder Feedback - Options for Market Participants with Mid-Planning Year Retirements or Suspensions
Supply Adequacy Working Group, February 5, 2015
Summary
8 companies provided feedback – MidAmerican said they would provide feedback but have not done so.
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Avoid PRA Participation - Units with approved Attachment Y should be exempt from offering into Planning Resource Auction (PRA) and IMM mitigation
– 5 companies
Replace Capacity - Retiring units that do participate in PRA must replace retiring capacity – 5 companies
Avoid Replacement – Should be some penalty amount, somewhere between auction price and CONE – 3 companies
Other – Seasonal Construct would partially or fully address mid-year retirements – 4 companies
Stakeholder
Wisconsin
Public Service
Otter Tail
Power
Company
Entergy
Avoid PRA Participation
Replace Capacity
Viable
Logical and primary way to
resolve
Approved Att Y units should be
able to abstain from PRA
Alliant
1. LSE that has satisfied RA
obligations w/o retiring resources
should be exempted from
offering in the PRA.
2. There should be tariff changes
to obviate need for waivers
3. Supports
DTE Energy
Units with approved Att Y should
be exempt from IMM mitigation
if not offering into PRA
Participating units must be
available for entire year or
there must be means for
replacing capacity
1. Not opposed to bi-lateral
self-service
2. Not opposed to use of MISO
bulletin board
3. Not certain what is meant by
“MISO Facilitated
Requirement”
4. Not opposed, but in Alliant
LRZs, most DR already claimed
as ZRCs
Retiring units that offer into
PRA must continue to meet
must-offer and replacement
requirements
Avoid Replacement
Other
Seasonal construct is
best option
MISO should establish fee at or
below CONE based on MWs
deficient and time to end of PY
1. Including potential
forfeitures in reference level
would not guarantee unit
would not clear
2. All future retirements not
related to MATS
If replacement ZRCs not
available (as determined by
MISO), there should be a
payment based on GVTC NonCompliance, ACP plus daily
Seasonal construct
greatly mitigates midyear retirements
Stakeholder
Duke Energy
Avoid PRA Participation
Units with approved Att Y should
not be required to offer into PRA
for period of retirement
/suspension. Must offer
requirement should be linked to
resolution of replacement
requirement for 6 week period.
Replace Capacity
MISO should facilitate
replacement by extension of
PRA of other mechanism.
Without tariff/MISO process,
bilateral cost could be high.
Uncertain if 6 week product
will trade after PRA.
Uncertain if all MATS units
could find replacement
capacity
Does not appear to reflect
change in current requirement
Avoid Replacement
CONE. Generators retiring midyear should not be exposed to
unknown ZRC replacement
costs
Other
Sensible to have penalty
defined prior to PRA based on
value of capacity at time of
year, i.e. zonal clearing price,
which may be too high
For inter-zonal replacement,
would CEL/CIL limits be based
on summer or 6 week period?
Replacement should not be
required for retired/suspended
units with no meaningful
impact on reliability
Maintenance margins
are inappropriate for
capacity metrics – first
in line method is not
very equitable means of
doling out waivers.
MidAmerican
Supports exemption from
retiring/suspending units from
participating in PRA, but not
limited to 2015/16 PY
IP&L
Options do not mitigate uncertainty or assure Resource Adequacy as defined by NERC. MISO
redefines RA and does not comply with MISO’s definition of Good Utility Practice.
IPL’s comments relative to the potential solutions are dependent upon MISO first implementing
changes to the measure of resource adequacy to conform to NERC’s definition of Adequacy aligned
with Good Utility Practice including recognizing seasonal load variations and seasonal resource
capabilities, i.e. lack of seasonality
1. Does not sufficiently address
As many options as feasible is
1. Should not be considered
Problem Statement. Harms RA
desired.
until seasonal is addressed.
and unnecessarily increases costs
Then based on days capacity
2. Requiring LSEs to utilize FERC
not replaced and ACP, i.e.
waivers is inappropriate
1.2*ACP
3. Hardly worthy of discussion.
2. Not viable long-term as it
Harms RA, increases costs and is
does not address midnot GUP
retirements beyond MATS
Investigate seasonal
construct as a longerterm solution to midPlanning Year
retirements
A construct that
recognizes seasonal load
variations and resource
capabilities – 4 seasons
with 4 PRMRs and peaks
APPENDIX – Complete Emails of feedback
Wisconsin Public Service
Wisconsin Public Service Corporation (WPSC) appreciates the opportunity to provide comments on the
capacity construct options for mid-year retirements or suspension. The options presented are viable,
and WPSC does not have a preference. However, we think that a seasonal capacity construct is the best
option to deal with mid-year capacity retirements for a couple reasons. A seasonal capacity construct
would allow a generator’s capacity to be utilized effectively for the season(s) during which it is still in
service. Further, seasonal forecasting will necessarily result in a lower capacity requirement in nonsummer seasons, which may make the unavailability of a capacity resource in those seasons a non-event
for the LSE claiming the capacity. The efficiency of MISO’s resource adequacy construct would be
improved greatly by a seasonal design.
Thank you,
Russell Laursen
Manager – Resource Planning and Policy
Wisconsin Public Service Corporation
920-433-1740
920-609-8450 cell
[email protected]
www.wisconsinpublicservice.com
Otter Tail Power Company
Good afternoon,
In the last SAWG call there was a request for comments regarding the Mid-Planning Year Plant
Retirement discussion. The presentation laid out three options:
Option 1: Avoid PRA
Option 2: Replace Capacity
Option 3: Avoid Replacement
Option 2 seems to be a logical solution to the problem if an additional resource or a bilateral purchase is
available. We would like to see option 2 as the primary way to resolve the issue. In the event that no
replacement resources are available, and no capacity is available to be purchased, we think Option 3 is
the next best solution. We would like to see MISO set up a fee based on the number of deficient MWs a
particular plant retirement results in. We feel the fee should be at or below the CONE value and prorated for the amount of time before the end of the planning year that the plant is retired.
Thank you,
Nathan Jensen
Senior Resource Planner
Otter Tail Power Company
215 S. Cascade St.
Fergus Falls, MN 56537
218-739-8989
Entergy
Entergy believes it is imperative that resources offering into the auction be available for the entire
planning year so that reliability standards can be met. Therefore, if a unit has an approved Attachment
Y, and the MP does not believe it will be able to perform or would be cost-inhibitive to run when
needed, then the resource should abstain from participating in the PRA. However, if the MP does
decide to offer the unit in to the PRA, either the unit must be made available for the entire planning year
or there must be means for replacing the capacity if it is no longer able to perform.
We support a first come, first serve platform where MISO verifies that reliability standards can still be
met for resources retiring or suspending operations so that replacement capacity is only required when
reliability standards are not being met.
As always, we appreciate the opportunity to provide feedback.
Thanks,
Sarah McCurdy
Entergy Services, Inc.
Supply Planning & Analysis
P: 281-297-6667
[email protected]
Alliant
Attached are Alliant Energy’s comments for the SAWG and LOLEWG request for feedback. You may post
these publicly.
Alliant Energy
February 2015 SAWG Comments.pdf
Jamie Niccolls, PE
Lead Resource Planning Consultant
Alliant Energy - 16th floor
200 First Street SE
Cedar Rapids, IA 52401
319-786-4882 desk
319-540-3054 personal mobile
[email protected]
DTE Energy
DTE Energy’s position is:
1. Generators that have been approved for retirement through the Attachment Y process and are
scheduled for retirement during the Planning Year, should be exempt from prospective mitigation by the
Independent Market Monitor should they decide not to offer ZRCs into the PRA.
2. Generator’s that are retiring within the Planning Year and that choose to offer ZRCs into the PRA must
continue to observe the Must Offer Requirement and ZRC Replacement provisions of the Tariff.
3. The replacement of retiring ZRCs should be facilitated by the Midcontinent ISO through either an
extension of the annual PRA or through some other mechanism. Absent a Tariff delineated and MISO
implemented process, acquiring replacement ZRCs bilaterally could result in inordinately high costs.
4. In the event that Replacement ZRCs are unavailable either partially or fully, a ZRC Replacement NonAvailability Payment should be enforced with that payment distributed either locally or footprint wide to
Load Serving Entities on a pro rata basis. MISO through their ZRC replacement process would be the
arbitrator on whether ZRCs were available or not.
5. The ZRC Replacement Non-Availability Payment should mirror what is currently in the Tariff for GVTC
Deferral Non-Compliance (ACP plus daily CONE).
6. DTE Energy believes that generators that will be available through a partial Planning Year should be
able to participate in the PRA and receive capacity payments without being exposed to unknown costs
for ZRC replacement upon retirement.
Regards,
Jim Czech
Principal Market Engineer-Generation Optimization/ DTE Electric Co.
414 s. Main Street Suite 300
Ann Arbor, MI 48104
734-887-4110
Cell: 734-732-6053
[email protected]
Duke Energy
Hello,
At the most recent SAWG, MISO asked for feedback on a number of issues.
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A retiring or suspending unit with an approved Attachment Y should NOT be required to offer into the
capacity auction timeframe that covers the date of retirement/suspension nor any period
afterward. Very similar to a retired unit should NOT be required to offer into the Day-Ahead market
which clears the day before the unit retires
The must offer requirement should be linked to a realistic resolution of the replacement requirement
for the 6 week period.
The assumption that a 6 week product will trade in the bilateral market after the auction closes is
uncertain. Furthermore, assuming that such product trades with sufficient depth that all of the MATS
retiring generation could find capacity in the bilateral market is very questionable.
A penalty, to be set or defined before the auction closes, seems to be the most sensible resolution
provided that it is commensurate with the value of capacity in that zone at that time of year. A penalty
set at the zonal clearing price, while probably still too high, would be a simple, reasonable and objective
solution.
It was mentioned that replacement capacity for the 6 week period could be procured from adjacent
zones subject to the CEL/CIL’s. Will those be the limits during the summer peak or the limits that
correspond to the 6 week period?
Separate comment from the Feb SAWG. We seemed to been going in semantic circles as we discussed
Maintenance Margin and Resource Adequacy. MISO appeared to be viewing Maintenance Margin in
very literal terms whereas stakeholders were using it as a proxy for the general level of resource
adequacy. When Maintenance Margin was being discussed for the 6 week period, I believe the purpose
was to illustrate the amount of capacity available relative to load. DEI supplied the Maintenance
Margins because FERC approved IP&L’s request. We did not support IP&L’s initial waiver
request. Maintenance margins are inappropriate for capacity metrics – first in line method is not very
equitable means of doling out waivers.
Thanks,
Scott
Indianapolis Power & Light Company
Please see attached for IPL’s feedback regarding the Retirement/Suspension Options presented by MISO
during the February 5th, 2015 SAWG meeting.
IPL's Feedback on
Mid-Planning Year Retirement Options.docx
Lake Hainz
Indianapolis Power & Light Company
Office (317) 261-6753
MidAmerican Energy
Thank you for MISO’s February 5 Supply Adequacy Working Group presentation on mid-Planning Year
retirements and suspensions. MidAmerican appreciates MISO’s work to address retirements and
suspensions that don’t align with the MISO Planning Year. You have our permission to post these
comments with those of other stakeholders.
The February 5 presentation offered three options and asked for additional suggestions:
Option 1, Avoid PRA participation
One option would exempt retiring / suspending resources from the requirement to participate in the
Auction. MidAmerican supports this alternative. Assuming the Commission accepts MISO’s recent filing in
Docket No. ER15-918, the only remaining tariff change would be to remove the tariff provision (proposed
in Docket No. ER15-918) that limits the exemption to resources retiring / suspending during the 2015-16
Planning Year.
MidAmerican recognizes that the Independent Market Monitor has expressed concern over resources
that might retire/suspend in order to affect Auction prices. While MidAmerican believes retirements /
suspensions for that purpose are unlikely, we believe stakeholders could work with the IMM to develop
language addressing these concerns if need be. We believe the current concerns result largely from an
unfortunate sequence of events in which 1) MATS-related retirements were announced roughly 2 years
ago, 2) the IMM’s concerns were not apparent until after the retirements were announced (partly because
of tariff changes that occurred after the IMM exempted retiring resources from the 2014 Auction). Any
review by the IMM should occur early in the Attachment Y process so stakeholders have certainty that
retirement decisions will not be subject to later review after retirement plans are finalized.
Option 2, Replace Capacity; Option 3, Avoid Replacement
The second option appears to reflect no change in any current requirement to 1) participate in the auction
and 2) replace any capacity that clears. As noted in its current request for waiver, MidAmerican opposes
the need to “replace” year-round capacity that an entity did not have in the first place and did not want to
offer. Likewise, MidAmerican’s request for waiver notes that there are conditions at certain times of year
when a resource can be retired / suspended with no meaningful impact on reliability. MidAmerican’s
upcoming retirements of its Neal 1 and 2 resources are examples. Resources should not have to be
replaced during such periods.
Conversely, MidAmerican acknowledges that a reliability concern could exist of any resource were
allowed to retire / suspend at any point in the Planning Year without replacement.
Recommendation
MidAmerican believes the issues surrounding Options 2 and 3 illustrate a flaw in the use of an annual
construct. A seasonal construct would inherently allow for better alignment between retirement dates and
seasonal periods, as opposed to the tariff’s current requirement for “all year or nothing” capacity.
We realize that either Option 2 or 3 will generate controversy among stakeholders. We therefore
recommend 1) investigating a seasonal construct as a longer-term solution to the issue of mid-Planning
Year retirements, and 2) pursuing, if a seasonal construct is not in place, Option 1 as a stop-gap measure
in time for the 2016 Planning Resource Auction.
Thanks again for MISO’s effort on these issues.
Greg Schaefer
MidAmerican Energy Company