Michigan PSC Sets Forward Local Capacity Requirement For Retail Suppliers
June 27, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Michigan PSC has set the forward local capacity requirements for LSEs, including retail electric suppliers, and adopted related parameters governing the local capacity requirement
The PSC adopted, with some modifications, an incremental capacity approach recommended by Staff in setting forward locational requirements, which includes determining a future incremental capacity need in a zone and then allocating that incremental need to LSEs within the zone as forward locational requirements
For local resource zone 7 (MISO zone 7, DTE/Consumers), the PSC established a forward locational requirement for each load serving entity as 1.5% of the load serving entity’s peak demand in planning year 2022/2023 and 3.0% of peak demand for planning year 2023/2024.
Each LSE in the zone will need the equivalent of 1.5%, or 3%, depending on the planning year, of its peak demand as the amount of ZRCs to come from local zone 7 resources.
In its decision, the PSC said, "the Commission agrees with the Staff that an electric provider’s load ratio share of the zonal incremental need should be assigned to all providers regardless of whether they fall short or not. The Commission views Consumers’ proposal (to allocate the incremental need to only those LSEs who fall short) as defeating the purpose of adopting the Staff’s incremental need approach. Consumers’ modification, if adopted, could result in AESs not knowing, before their capacity demonstration deadline, what the need is for zone 7, and could therefore result in AESs procuring resources equal to their full load-ratio share of the zone’s LCR regardless of whether the zone might have excess resources from other suppliers. The Commission therefore finds that both ROA and bundled utility customers should be allocated portions of the resulting incremental need arising from new local generation retirements."
The Commission agreed with the Staff’s proposal to use planning year 2021/2022 as the baseline forecast year to calculate incremental need
The Commission rejected Energy Michigan’s recommendation that LSEs be given the option of settling capacity obligations at the MISO auction clearing price (ACP) when customers transfer from one LSE to another. Instead, the Commission approves the Staff’s recommendation that changes in load levels for an LSE that affect its forward capacity demonstration be litigated in a show-cause case. However, the PSC said that this determination does not preclude LSEs from settling capacity obligations among themselves when customers transfer to a new supplier in order to allow for sufficient LSE capacity demonstrations to take place, or as a proposed remedy to an insufficient capacity demonstration in a show-cause case.
The PSC set the forward locational requirements for MISO zones 1 and 2 and at zero for planning years 2022 and beyond until reevaluated in a future case