Dive Brief:
- Dynegy and Exelon have proposed a series of market reforms to the Midcontinent Independent System Operator (MISO), calling for longer planning cycles rather than a 12-month capacity auction which they say can distort price signals.
- Dynegy is calling for a series of four one-year auctions running through 2021, and Exelon proposed a similar method using rules from neighboring PJM Interconnection, according to EnergyWire.
- MISO, last fall, said that capacity market reforms may be required to drive future investment and maintain reliable supply. The generators submitted their proposals to a MISO task force addressing market issues in a portion of Illinois.
Dive Insight:
Last year, a MISO capacity auction in Zone 4, mostly made up by Southern Illinois, 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.
"We need to make sure the market design is sufficient to either ensure that exist resources will consistently be available into the future or that new resources would replace them were those existing resources to go away," MISO spokesman Jeff Bladen told EnergyWire.
According to Exelon, utilizing an auction mechanism in southern Illinois that is similar to the process in PJM markets would help ensure "parity between northern and southern Illinois," the generator said in its filing.
Dynegy, which came under investigation following the price spikes, said a series of four auctions would provide a better price signal. Illinois Attorney General Lisa Madigan last year asked federal regulators to halt the subsequent rate increase associated with the auction in question, and to investigate the utility.
Dynegy defended its actions, claiming it "offered all of its megawatts into the MISO auction with no physical or economic withholding in accordance with MISO tariffs and as approved by the Independent Market Monitor."
EnergyWire notes MISO is gearing up for another, similar meeting next month, where a wider group will propose capacity market changes.