Michigan PSC Opens Contested Case To Determine Requirement For Forward Locational Capacity Requirement For Retail Suppliers, LSEs (Allocation, Demonstration)

The Michigan PSC issued an order in Case No. U-18444 opening a contested case proceeding for determining the process and requirements for a forward locational requirement for generation resources used to meet electric capacity obligations under Section 6w of 2016 PA 341 (Act 341).

While the PSC previously determined that statute requires a locational capacity requirement, and that the PSC is authorized to impose such a requirement on specific LSEs such as retail suppliers, the PSC deferred issues related to the locational requirement, such as the determination of a methodology for the amount and allocation of a forward locational requirement, to a later contested case proceeding, which is being initiated in the instant order

The PSC directed Staff to submit a proposal to initiate consideration of the issues. Staff's proposal shall address, among other things:

• What is the MISO LCR for each zone?

• How should the LCR, for purposes of Section 6w, be projected four years into the future as set forth in the law?

• How should the incremental capacity need be determined initially and also going forward?

• What load projection should be used for the analysis and should the projection be set at base year or have a growth assumption?

• Once the incremental need is determined, how should the incremental need be allocated to the load serving entities within the zone?

• Should allocations be based on load ratio share or some other approach?

• How should changes in load levels for each LSE over time be accounted for?

• How does the recommended incremental capacity need with allocation translate to the individual load serving entity locational requirements in zonal resource credits per planning year?

• Based on the Staff’s proposed methodology, what is the recommended incremental capacity need for the 2022/2023 planning year and how would that be allocated among load serving entities?

• What evidence or guarantees must an LSE provide to show it will meet Michigan’s forward locational requirement?

• What resources should count towards meeting Michigan’s forward locational requirement?