FERC: "Premature" to Fundamentally Redesign MISO Capacity Market

It would be "premature" to undertake a fundamental re-design of the Midwest ISO resource adequacy plan at this time, FERC said in denying rehearing on prior orders regarding the current "voluntary" monthly capacity auction in MISO (ER08-394).

FERC's pronouncement did not come in the docket addressing MISO's pending proposal to institute a 12-month capacity obligation and centralized auction. However, when FERC later addresses MISO's proposal to implement a 12-month capacity obligation and centralized auction, FERC would have to address its current finding.

Specifically, FERC, in rejecting previously filed proposals to modify the monthly auction, said that, "We agree with the Midwest ISO that it is premature at this time to develop stabilization provisions or otherwise undertake a fundamental re-design of the Midwest ISO resource adequacy plan. Many aspects of the Midwest ISO permanent resource adequacy plan, including provisions accepted and revised in this order and other companion orders, are still in the process of development. More time is needed for an assessment as to whether the market design is resulting in inadequate investment or hindering reliability."

Such "stabilization measures" were sought by capacity owners and included measures such as an annual mandatory auction and/or demand curve.