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Requiring Retail Suppliers To File Fixed Resource Adequacy Plans Under Consideration In New Illinois Workshop Process

November 13, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Illinois Commerce Commission has initiated a workshop process to examine resource adequacy in MISO Zone 4 (Ameren), and several proposals to be considered in the process would impose new obligations on competitive retail electric suppliers

One potential solution identified in a white paper (click here) would be requiring alternative retail electric suppliers (ARES) to submit a fixed resource adequacy plan (FRAP) to MISO. FRAPs are a means LSEs may use to meet MISO capacity obligations other than the capacity auction. FRAPs must cover a set amount of load and identify various resources to serve such load. The white paper notes that, retail suppliers are unlikely to use FRAPs, because, in restructured retail markets, the load of alternative retail electric suppliers and the basic service provider utility is subject to fluctuation due to customer switching, often making long-term contracts and the construction of generating resources impractical.

The white paper notes that, while the Illinois Power Agency and the ICC could, under existing authority, administer procurements to procure resources that would enable Ameren Illinois to submit a FRAP to MISO, the IPA and the ICC currently do not have the authority to require ARES to submit FRAPs.

With statutory changes, "ARES could be required to submit FRAPS to MISO and to provide advance reports of such to the ICC," the white paper notes.

Another alternative included in the white paper is that the IPA, with ICC oversight could procure capacity on behalf of Alternative Retail Electric Suppliers serving load in Ameren Illinois’ service area. "The General Assembly could, in order to address resource adequacy, provide the IPA and the ICC authority to administer capacity procurements on behalf of ARES as well as Ameren Illinois acting as the basic service provider. Such legislation could specify how capacity is to be procured, assign the design to the IPA and the ICC, or adopt some hybrid of the two approaches. This could include plans that specify a forward procurement period, allow for multi-year capacity purchases, capacity purchases that enhance supply diversity, or other factors that may increase long-term resource adequacy in MISO Zone 4," the white paper states

The white paper does not discuss how capacity costs through any such procurement on behalf of ARES load would be allocated and recovered

The white paper also includes as a potential solution creation of a Resource Adequacy Portfolio Standard similar to the nuclear portfolio standard recently adopted. With respect to the nuclear standard, cost recovery of the costs of the standard was done on the non-competitive side of the bill.

"Reconfigur[ing]" RTO participation for Ameren is also listed in the white paper as a potential solution, though Section 16-126.1 of the Public Utilities Act currently prohibits the State from preventing a utility from participating in an RTO of its choosing

The ICC is accepting comments on the white paper and scheduled a workshop for December 7, 2017.

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