MISO argues that its system support costs for Presque Isle coal plant were just

The Midcontinent ISO in a May 16 initial brief filed at the Federal Energy Regulatory Commission argued for the prudency of the system support resource costs paid to Wisconsin Electric Power earlier this decade to keep the coal-fired Presque Isle Power Plant (PIPP) Units 5-9 in Michigan’s Upper Peninsula open for grid support purposes.

Wisconsin Electric submitted an Attachment Y notice to MISO in August 2013 stating its intent to suspend operation of Presque Isle Units 5-9 beginning in February 2014. MISO completed its Attachment Y analysis and notified Wisconsin Electric in October 2013 that Presque Isle Units 5-9 were needed for reliability purposes, absent the identification of an alternative, and the Presque Isle units were thereafter designated as an SSR facility. SSR costs are passed along to market participants in the region.

Following the end of the SSR agreements, Presque Isle was returned to non-SSR service in February 2015.

Said MISO’s May 16 brief: “The MISO Tariff provides that MISO and a Market Participant that desires to retire or suspend operations at a facility negotiate compensation for any System Support Resource (SSR) agreement if MISO determines that the facility is needed to maintain system reliability. This approach taken in the MISO Tariff towards developing SSR compensation was visited by the Commission in 2012.

“Earlier, the Commission explained in its approval of the MISO SSR program that units should be ‘fully compensated,’ and that ‘nothing in the SSR program would require a generator to absorb any uncompensated going-forward costs.’ This precedent provides the backdrop for the instant proceeding regarding compensation for SSR service. The issues of fixed and variable compensation under SSR agreements regarding the Presque Isle Power Plant (‘PIPP’) arise out of orders by the Federal Energy Regulatory Commission.

The terms negotiated by MISO for the SSR agreements and submitted to the commission were just and reasonable, MISO said.

It added: “A continuing need for the PIPP units to run as they had historically for transmission reliability was expected, which supported reliance on historical information. Compliance costs for Mercury and Air Toxics Standards costs, initially expected to be much larger than those that actually took place, were not included in the calculations since they were not considered going forward costs.

“The Commission requires that a SSR unit be fully compensated for its operating costs for the period of extended service following an announced date for suspension of operations or retirement of a generating unit. To ensure the continued reliability of the transmission system in the MISO footprint, the Presiding Judge should find such just and reasonable compensation that was appropriate under the standards for the periods during which PIPP operated under SSR agreements.”

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.