Dive Brief:

• Over the last two years, the Midcontinent Independent System Operator (MISO) has saved seven coal and natural gas-fired power plants from retirement by designating them as System Support Resources (SSR), meaning plants that are inefficient or unprofitable are kept running to maintain grid reliability. 
• Even more SSR designations in MISO's footprint are expected in the next two years as the 2016 deadline of the EPA's Mercury and Air Toxics Standards (MATS) approaches, analysts say. 
• “SSR designation is very much a last resort – but it is something we’re seeing much more of given MATS and other environmental regulation and other industry trends like gas prices,” said MISO spokesman Andy Schonert. “That has resulted in us seeing more of these [SSRs] and I don’t get the impression these will be going away any time soon.”

Dive Insight:

When a plant is scheduled for retirement, its owners have to file with MISO, who then decides whether the grid can afford to lose the plant. If not, MISO can order it to keep running by paying compensation costs to the owners of these typically very unprofitable assets. The costs of keeping them going will ultimately be borne by ratepayers. SSRs are "a backstop mechanism" to maintain reliability, said MISO's Andy Schonert.

But a more long-term solution is needed, some say. "The market was supposed to provide for generation and transmission, but these agreements are a way to bypass the market," said Mark Pruitt, Principal at the Illinois Community Choice Aggregation Network. "Why is your market in the position where these plants owners want to close the plants and yet they’re still needed?”