On February 12, 2016, FERC issued an order accepting the Midcontinent Independent System Operator, Inc.'s ("MISO") proposed tariff revisions. Specifically, FERC approved, subject to condition, tariff revisions to (1) permit suspended generation resources to participate in the Planning Resource Auction ("Auction"), (2) extend the period of time for a market participant to rescind its Attachment Y Notification from 5 business days to 15 business days after receiving notice by MISO that the Attachment Y study is complete, and (3) allow suspended generation resources to qualify for deferred Generation Verification Test Capacity ("GVTC") testing. MISO stated that these tariff changes are intended to improve alignment between the Auction and the Attachment Y process in order to remove barriers to Auction participation for generation resources that are in suspension or have filed to be suspended or retired.
Under its Open Access Transmission, Energy and Operating Reserve Markets Tariff ("Tariff"), MISO conducts the Auction in the beginning of April prior to the Planning Year. The Auction selects the least-cost set of Planning Resources to meet the planning reserve margin requirement of each Local Resource Zone ("Zone") and establishes the Auction clearing price for each Zone for the upcoming Planning Year. Prior to MISO's proposal to revise its Tariff, a resource for which a market participant requests a change in status to retire or suspend would not qualify as a Planning Resource effective as of the actual date of the status change to retire or suspend.
In its filing, MISO explained that it recognizes the need for flexibility regarding decisions by owners of generation resources to retire or suspend, and the results of the Auction could influence such decisions. Accordingly, MISO proposed to revise its Tariff to clarify that a suspended generation resource will still qualify as a Planning Resource. According to MISO, this revision will provide market participants with opportunities to efficiently make de-activation and re-activation decisions based on the availability of the resource to participate in the Auction. Under the proposal, a market participant whose suspension of a generation resource is not driven by market economics can coordinate with the Independent Market Monitor ("Market Monitor") to ensure the physical withholding provisions of the Tariff are not applied in that circumstance.
To implement the expansion of Auction participation, MISO also proposed to revise its Tariff to specify that a suspended generation resource, which is not a dispatchable intermittent resource, that has not completed GVTC testing by the deadlines provided in the Tariff may still be offered into the Auction or used in a Fixed Resource Adequacy Plan. Additionally, MISO proposed to extend the period of time for a market participant to rescind its Attachment Y Notification (and thus to revoke the decision to suspend or retire) from 5 business days to 15 business days after receiving notice that the Attachment Y study is complete. MISO explained that these revisions encourage expanded participation of suspended resources in the Auction by aligning the Auction and the Attachment Y process. MISO further explained that a market participant can coordinate with the Market Monitor to set a facility-specific reference level for a suspended generation resource, thereby allowing the market participant to offer the resource into the Auction at a price such that partial clearing of the resource would not result in a financial hardship for the market participant.
In the order, FERC found it reasonable to (1) permit suspended generation resources to participate in the Auction, (2) extend the period of time for a market participant to rescind its Attachment Y Notification, and (3) allow suspended generation resources to qualify for deferred GVTC testing. In addition, FERC determined that any suspended generation resource that participates and clears in the Auction will be subject to the same testing and performance requirements as any other generation resource that clears the Auction. However, to ensure that MISO's proposal does not encourage market participants to suspend resources that would otherwise remain operational in order to physically withhold those resources from future Auctions, FERC directed MISO to make a compliance filing to revise its Tariff to provide specific non-economic circumstances under which a market participant can refuse to offer its suspended generation resource into the Auction. FERC also directed MISO to make any necessary conforming edits to the Tariff and encouraged, but did not direct, MISO to file Tariff revisions that address the risk that a market participant may not be able to recover its net going-forward costs if its suspended generation resource partially clears the Auction. Therefore, FERC conditionally accepted MISO's proposed revisions, subject to the condition that MISO make the required compliance filings.
A copy of the order is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
