A group of independent power producers on Monday urged the Federal Energy Regulatory Commission to reverse the Midcontinent Independent System Operator’s roughly $280 million ongoing “settlement adjustment” of its most recent capacity auction.
“The market-wide uncertainty created by MISO’s decision to conduct what amounts to a rerun of the 2025/2026 [Planning Resource Auction] will harm MISO’s ability to retain and attract investment in the baseload resources needed to maintain resource adequacy,” the Coalition of Midwest Power Producers, JERA Nex Americas and Rainbow Energy Center said in the complaint at FERC.
Pelican Power, the market participant for about 3,415 MW in Louisiana and Texas, filed a similar complaint on Nov. 14. Like the other IPPs, Pelican Power contends that MISO is effectively resettling its last capacity auction in violation of the filed rate doctrine and the rule against retroactive ratemaking.
The MISO dispute is driven by a software coding error that affected the grid operator’s “loss of load expectation” calculations used to set its planning reserve margins in its capacity auction, held in March, for the planning year that started on June 1.
MISO disclosed the “continuing error” — a continuing software, system or other execution that is inconsistent with MISO’s tariff — in August, when it told its stakeholders it planned to adjust payments to market participants that were either long or short capacity during the auction. In MISO’s adjustment process, market participants that had excess capacity at the time of the auction will be charged by the grid operator and those that were short will receive a credit.
“MISO is not rerunning or resettling the [auction], nor will it take new bids or establish a new auction clearing price,” MISO said in a fact sheet explaining its response to the LOLE error.
“Consistent with the tariff, MISO will instead apply an ‘appropriate adjustment’ using corrected LOLE values for the 2025/26 planning year,” it said.
In a Monday response to Pelican Power’s complaint, MISO said it is required to make appropriate adjustments to address the financial effects from continuing errors.
“MISO appreciates that Pelican argues that the appropriate adjustments are unfair or inequitable,” the grid operator said. “But this result, however harsh, is required by the filed rate doctrine.”
MISO urged FERC to dismiss the complaint. MISO is reviewing the IPPs’ complaint filed on Monday and will respond at FERC, McKenzie Barbknecht, a spokesperson for the grid operator, said in an email.
Potomac Economics, MISO’s market monitor, also asked FERC to reverse the grid operator’s settlement adjustments, which it said undercuts contracting and resource decisions made before the auction took effect.
“Resettling with participants based on alternative capacity prices undermines these decisions, causing some decisions and transactions made in good faith based on the available information to be ill-advised in retrospect,” Potomac Economics said.
Cooperative Energy, a generation and transmission cooperative based in Hattiesburg, Mississippi, supported Pelican’s complaint. In contrast, the Municipal Energy Agency of Mississippi and, in a joint filing, the Illinois attorney general’s office and the Coalition of MISO Transmission Customers opposed it.
Entities affected by the settlement adjustment make up about 10% of MISO market participants because most load-serving entities supply their own capacity or buy it before the auction, according to the grid operator.
In the auction, capacity in MISO’s North and South regions cleared at $666.50/MW-day for the summer season. Under the revised calculations, the effective capacity prices in MISO South fell 56% to $292.20/MW-day and 31% in MISO North to $459.10/MW-day, according to the complaint filed by the independent power producers.
The summer season accounted for about 80% of the total adjustments, according to MISO.
In a Nov. 18 notice, MISO said it would begin making a $76.8 million settlement adjustment — the last of three adjustments covering the summer season.
