Dive Brief:
- The results of MISO’s planning resource auction have revealed adequate resources to meet demand for the coming year, but a smaller resource portfolio led to higher clearing prices in several regions, EnergyWire reports.
- The grid operator for much of the Midwest said last week that a total of 135,483 MW of planning resources are available for the planning year beginning June 1, including 122,379 MW of generation resources.
- Plant retirements led to a smaller supply resource, according to executive vice president Richard Doying. Capacity prices ranged from $2.99/MW-day to $72/MW-day.
Dive Insight:
With coal plants increasingly under pressure, MISO said industry forces are driving "significant shifts to the generating fleet." While resources remain stable, despite slightly higher capacity prices, the grid operator is looking ahead at how to adapt to the changing market.
“The generation fleet across MISO is rapidly changing,” Richard Doying, executive vice president of operations and corporate services, said in a statement. “While more generation is retiring, resulting in a tighter supply across the MISO region, the auction results show that there are sufficient resources to maintain reliability for this planning year.”
Cleared planning resources included 122,379 MW of generation, 3,462 MW of behind-the-meter generation, 5,819 MW of demand resources, and 3,823 MW of external resources.
Less supply in the Midwest region due to retirements and capacity exports "contributed to higher clearing prices in several zones," the grid operator said. However, the decrease in available capacity was consistent with the 2015 OMS-MISO Survey. "As a result of the continued changes in the fleet, several zones relied on imports from other zones to procure adequate capacity," MISO said.
Local Resource Zone 1 cleared at $19.72/MW-day; zones 2 through 7 cleared at $72; and zones 8, 9 and 10 cleared at $2.99.
"As fewer generation resources are available, MISO is working to address seasonal and locational issues while also ensuring that market signals provide incentives for investment where and when needed," the operator said. MISO will be discussing modifications to its resource adequacy construct with stakeholders, looking to provide greater operational certainty during both the winter and summer months. And the grid operator said it developing proposals to streamline resource adequacy planning "to better reflect locational issues."
The grid operator expects to file with FERC two proposals addressing those issues next month.
MISO also said it is currently working on a proposal to address concerns from stakeholders in retail choice areas.
"In March, MISO introduced a proposal to address price formation and timing in retail choice areas, while still retaining the existing construct for the rest of the footprint," the operator explained. It is currently reworking proposals with stakeholders and expects to file with FERC in July 2016.
These proposed changes are part of reforms were pushed by Dynegy and Exelon, which called for longer planning cycles rather than a 12-month capacity auction which they say can distort price signals. These reforms came in response to a MISO capacity auction in Zone 4, mostly made up by Southern Illinois, that cleared $150/MW-day compared to $16.75/MW-day during the same period last year.
That led to investigations and claims generators may have been manipulating the market. In response, MISO kicked off a task force to address the issues and consider market reforms, which it now appears could include a restructuring of how the region plans for its power needs.