Midwest Generators Ask FERC to Impose Deadline for MISO Resource Adequacy Enhancements

Notwithstanding the fact that several states in eastern forward capacity markets are racing to take any action to blunt or mitigate the pricing impacts from such markets, several generators filed a protest at FERC requesting that FERC impose strict deadlines for the Midwest ISO to implement revisions to create a forward capacity market by June 2013 (ER08-394).

Protesting generators included Exelon Corporation, Dynegy Power Marketing, Inc. and GenOn Energy.

As only noted in Matters (12/9), MISO filed with FERC a resource adequacy "foundation" which contemplates a mandatory capacity auction and a three to five year forward compliance obligation for load serving entities.

The protesting generators argued that MISO's foundational elements, which came in the form of a report and not tariff language, are inconsistent with a FERC deadline for filing a compliance plan that details the steps that will be taken to incorporate locational capacity market mechanisms, since MISO's filing does not include any formal proposals.

"Joint Protesters believe forward capacity markets are especially crucial to maintain reliability without the proliferation of Reliability Must Run contracts," the generators said, which is especially ironic given actions from several state policymakers who have been forced to procure new capacity in the absence of new development from forward capacity markets (most recently in New Jersey), and the fact that Exelon sought to enter into a Reliability Must Run agreement for several PJM units (Cromby/Eddystone #2) notwithstanding the billions paid by ratepayers in PJM through capacity markets.

The protesting generators sought a FERC order directing MISO to file tariff amendments addressing resource adequacy requirement enhancements, including forward capacity auctions and locational capacity requirements, by June 1, 2011, for implementation in June 2013.