MISO says life extension compensation for Edwards 1 is adequate

The Midcontinent Independent System Operator (MISO) told the Federal Energy Regulatory Commission on July 25 that it provided a proper level of compensation for the short-term operation of the coal-fired Edwards Unit 1 in Illinois while needed grid support improvements are made.

On July 5, AmerenEnergy Resources Generating filed a complaint at FERC under Section 206 of the Federal Power Act (FPA) challenging compensation provided for System Support Resources (SSRs) under MISO’s tariff. The complaint addresses SSR cost recovery provisions under the tariff. The complaint states that: additional compensation (e.g., based upon a return on capital investment in existing plant for an SSR unit) should be provided for SSR units under the tariff; or the tariff is unjust and unreasonable, in part, because it does not permit such additional compensation.

The SSR provisions permit MISO to negotiate compensation for selected generation resources where a market participant desires to retire or suspend operation of a facility, but MISO determines that the facility is needed to maintain system reliability while grid improvements are made to allow that generating capacity to be shut down. The costs pursuant to an SSR agreement generally are assigned to the Load Serving Entities (LSE) in the affected control areas.

Edwards Unit 1 is a 90-MW coal-fired steam boiler located in Bartonville, Ill. In August 2011, Ameren submitted a notice to MISO to suspend operation of Edwards 1 as of Feb. 6, 2012, for a period of 36 months. In December 2012, Ameren submitted a revised notice to MISO to retire Edwards 1, effective Dec. 31, 2012.

In December 2012, MISO notified Ameren of the SSR status of Edwards 1. “MISO’s notification to Complainant stated that Edwards 1 would be designated an SSR Unit until such time as appropriate alternatives could be implemented to mitigate reliability issues,” said MISO in its July 25 answer. “The analysis concluded that the proposed retirement of Edwards 1 would result in violations of specific applicable Ameren Transmission Company planning criteria during the summer and shoulder peak load periods until the completion of transmission reinforcements that include the 345kV Maple Ridge-Fargo line and Maple Ridge Substation. As a result, MISO designated Edwards 1 as an SSR Unit until such time as appropriate alternatives could be implemented to mitigate reliability issues.”

A draft SSR agreement was developed between MISO and Ameren regarding an SSR agreement for calendar 2013. On July 11, MISO submitted the unexecuted SSR agreement to the commission for approval to ensure grid reliability in the MISO region by temporarily continuing the operation of Edwards 1.

“The Complaint states two alternative bases upon which the Commission might grant Complainant’s desire for increased compensation for the continued availability of Edwards 1,” said MISO. “The first alternative questions MISO’s interpretation and application of its own Tariff. The second argument seeks additional compensation based upon a proposed change to the relevant Tariff provisions. As described below, the Tariff does not permit the compensation that Complainant requests. Any prospective discussions regarding changing the Tariff to modify the compensation paid to those who control Generation Resources should be conducted between Complainant and those persons who would bear the burden of financially supporting the continued availability and use of SSRs.”

Edwards 1 may have as long as December 2016 to live

MISO on July 11, within the unexecuted SSR, submitted to the FERC what is in essence a retirement schedule for Edwards Unit 1. A planned transmission upgrade that, after completion, would enable Edwards 1 to retire is proposed in the MISO Transmission Expansion Plan 13, subject to approval by the MISO Board of Directors in December 2013. The completion of this transmission upgrade will resolve the need for Edwards 1 to be designated as an SSR unit. Until this alternative solution is completed, however, Edwards 1 will be required for system reliability, and the SSR agreement is necessary to ensure continued system reliability.

Although MISO expects that the Edwards 1 will continue as an SSR unit until the Maple Ridge–Fargo 345-kV transmission project is completed in December 2016, other alternatives will be sought in considering the annual renewal of the SSR agreement.

MISO currently believes that the subject SSR agreement may be required for at least the twelve-month term ending Dec. 31, 2013, and it anticipates entering into a subsequent SSR agreement with Ameren for the period from Jan. 1, 2014, until the completion of the Maple Ridge–Fargo 345-kV project in December 2016.

The Edwards plant began commercial operation in 1960 with Unit 1. Edwards Unit 2 (240 MW net) began commercial operation in 1968, while Unit 3 (315 MW net) began commercial operation in 1972. Units 2 and 3 are not involved in this retirement deal.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.