Retail Suppliers: Latest Midwest ISO Capacity Market Mechanism "Unworkable"

The Midwest ISO's latest proposed changes to its capacity market, regarding the allocation of capacity obligations, are "unworkable" and reveal the flaws inherent in MISO's current methodology, the Retail Energy Supply Association said in comments to FERC.

As first reported by Matters, MISO filed several tariff changes with FERC because the adopted capacity allocation mechanism is subject to two risks: (1) that some Planning Resource Margin Requirement may not be sufficiently accounted for and modeled at the time of the Planning Resource Auction; and (2) that some Load may switch providers during the Planning Year, which would result in an originally serving LSE having over-procured capacity and the LSE acquiring the new Load having under-procured sufficient capacity

See Prior Story: MISO Says FERC-Approved Capacity Mechanism Could Result in Some Retail Suppliers Over-paying

While MISO proposed a series of changes, RESA said in a protest that the latest changes are "unnecessary gymnastics" attempting to correct a fatally flawed allocation methodology.

"Midwest ISO’s latest efforts to fix 'deficiencies' shows just how unworkable Midwest ISO’s Tariff is and why, as RESA has advocated all along, retail LSEs should be permitted to compile and report their own coincident peak demand information, procure capacity based on its information and that of the EDC and permit assignment of the capacity obligation from one LSE to another," RESA said.

Aside from being overly complex, RESA said that MISO's latest proposal, "results in unduly discriminatory results in that LSEs with high annual load factors would pay proportionally more than LSEs with low annual load factors."

"This result is unjust and unreasonable and unduly discriminatory, since in non-retail choice jurisdictions as well as in EDC areas using the 'preferred default peak load contribution methodology' the Planning Reserve Margin Requirement ('PRMR') is not dependent on load factor," RESA said.

Link to RESA Protest

Docket: ER12-2706