Day-Ahead Margin
Assurance Payment
Tariff Discrepancy
March 9, 2017
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Summary
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A discrepancy dating back to 2009 was recently discovered between
MISO’s Tariff and its settlement and business practices related to
Eligibility for Day Ahead Margin Assurance Payments (DAMAP)
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The settlement process in use since 2009 is consistent with the
original intended business design, Business Practice Manual (BPM),
and participant training materials.
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MISO will soon make a Section 205 filing to align the Tariff to the
settlement practices and BPM provisions representing no change to
current settlement practices
•
MISO will continue with already planned and unrelated stakeholder
processes to consider improvements to revenue guarantee market
rules including DAMAP enhancements as suggested by the IMM
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Tariff Discrepancy with the Business
Practices Manual (BPM)
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Section 40.3.6.4(c) in Module C provides
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MISO’s BPM precludes DAMAP eligibility for that hour in which the
Charge arose
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There is no DAMAP preclusion for all remaining hours in the Day-Ahead
Commitment Period
Precluding DAMAP for all remaining hours limits dispatch flexibility
The BPM method is what MISO intended to implement in 2009
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Any Resource receiving an Excessive/Deficient Energy Deployment Charge in an
Hour will be ineligible for DAMAP in that Hour and all remaining Hours in the DayAhead Transmission Provider Commitment Period
While DAMAP settlements have not been made in accordance with the Tariff
provisions all settlements since 2009 have been consistent with BPM protocols
The practice described in the tariff was neither the intended method nor has it ever
been used by MISO before or since 2009
This discrepancy was previously unknown to MISO and the Independent Market
Monitor (IMM)
MISO’s Response to the Settlement
Discrepancy
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MISO reported to FERC’s Office of Enforcement
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Identified potential Tariff compliance issue
MISO engaged the IMM
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No gaming or anomalous behavior has been identified
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IMM does not support resettlements
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IMM did indicate that timing may be ripe to review and revisit DAMAP provisions with
stakeholders
MISO analyzed the scope of the discrepancy
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Review of timing and market impact: Settlements consistent with BPM date back to
January 2009
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Detected difference between Tariff’s DAMAP language and rule intended by personnel
involved in DAMAP’s design
MISO Conclusions
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Settlement process consistent with business design intent and BPM
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All settlements occurred consistent with intended design
Resettlement is not appropriate based on equitable grounds
Abruptly implementing the Tariff as written would disrupt the market
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Prior decisions made by Market Participants relied on DAMAP eligibility being precluded
for that hour in which the Charge arose
IMM shares this concern
Going Forward
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Section 205 filing will be made to align Tariff to BPM provision
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MISO will not recommend resettlement
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Continue with already planned stakeholder process to consider
revenue guarantee related market design improvements including
DAMAP enhancements as suggested by the IMM
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Appendix
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Background: Revenue Sufficiency Payments
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Resources that are economically committed into the Day-Ahead Market
are guaranteed recovery of certain costs, including Day-Ahead Margin
Assurance Payments (DAMAP)
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Provides cost recovery for resources that are dispatched in real-time below their DayAhead Schedule
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Protects a resource forced to settle at an LMP or MCP against the erosion of DayAhead Margins (often caused by manual re-dispatch or price volatility)
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MISO’s current business practices preclude a resource that incurs a
Excessive/Deficient Energy Deployment Charge from being eligible to
receive a DAMAP payment for that hour in which the Charge arose
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Recently, a discrepancy was discovered between MISO’s Tariff and its
current business practices
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