Large industrials file complaint at FERC over aspects of MISO auctions

Filed Sept. 8 with FERC was a complaint from the Coalition of MISO Transmission Customers (CMTC) over issues that these large industrials think are impeding the flow of power between zones in the Midcontinent ISO region.

The complaint addresses three issues.

  • First, during the most recent MISO Planning Resource Auction (PRA), MISO misapplied provisions of the MISO Open Access Transmission, Energy and Operating Reserves Market Tariff (MISO Tariff). The misapplication caused a constraint between MISO South and MISO Midwest to bind sooner than it should have bound. As a result, capacity imports in the 2016-2017 Auction from the MISO South Region (Zones 8-10) bound at a level of 876 MW and prices separated between MISO Zones, clearing at a price of $2.99 per MW-Day in Zones 8-10 and a price of $72.00 per MW-Day for Zones 2-7. Correction of the import limits between MISO South and MISO Midwest will reduce clearing prices in MISO Midwest to $20.00/MW-day, based on the supply offer information that was provided by the MISO Independent Market Monitor (IMM), the complaint said. Under Section 206 of the Federal Power Act (FPA), the commission should set the just and reasonable rate at $20.00/MW-day. The commission should also take actions to ensure that compensation continues for the 206 MW of resources that offered in excess of this revised clearing price. Accordingly, CMTC requests the commission, pursuant to its remedial authority under Section 309 of the FPA, to direct MISO to provide the necessary refunds of excess capacity payments collected from customers.
  • Second, to prevent recurrence of the misapplication, the commission should order MISO to clarify its tariff regarding the calculation of import limits from MISO South to MISO Midwest. Specifically, CMTC requests the commission to direct MISO to clarify the MISO Tariff to ensure that MISO uses the correct total transfer capability that is expected to be available for exports from MISO South to MISO Midwest regions in future auctions.
  • Third, the offers that comprise the supply curve for the 2016-2017 PRA show significant “step-jumps” near the end of the curve and show offers that appear to exceed any reasonably calculated level of going-forward costs. The IMM is afforded significant discretion, by virtue of vague and ambiguous provisions in the MISO Tariff, to review and calculate individual unit capacity offers, the complaint said. The commission has declined requests to eliminate or curtail this discretion. However, due to confidentiality restrictions on offer data, neither customers nor others (outside of MISO, the IMM, and FERC) are positioned to determine whether the discretion is being exercised to produce just and reasonable outcomes or outcomes that may be unjust, unreasonable, and unduly discriminatory. Accordingly, CMTC requested that the Commission undertake its own audit of the IMM’s approval of the 2016-2017 PRA offers including, but not limited to, any facility-specific reference prices.

"These three remedial steps are necessary, in part, to fix just and reasonable rates for the 2016-2017 Planning Year and, in remaining part, to help ensure just and reasonable rates for future Planning Years," the complaint said. "CMTC also respectfully requests that the Commission fast-track the aspects of this proceeding that must be in place prior to the 2017-2018 PRA. These aspects include the clarifying changes to the MISO Tariff regarding import limit calculations and the steps to ensure proper application of the mitigation provisions of the existing MISO Tariff."

CMTC is an ad hoc association of large industrial customers with facilities located throughout the MISO region. CMTC-represented facilities located within MISO’s footprint consume more than 8 billion kWh of electricity annually.

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.