MISO looks to avoid south region reserve shortfall

Spanish Market: Coal, Electricity, Natural gas
19/03/15

The Midcontinent Independent System Operator (MISO) estimates that an additional 11GW of capacity in the grid's new southern region could potentially participate in the annual planning resource auction which would be sufficient to meet the planning reserve margin requirement there.

An updated staff report shows 141.5GW of confirmed resources will be available across MISO in the upcoming planning reserve auction scheduled for 27-31 March, a 3pc increase from the amount that cleared in last year's auction.

The grid operator allows auction participation only for confirmed resources, which is the capacity verified by market participants. Market participants have until the close of the auction window to confirm the capacity, making it possible that at least some of the 11GW will be offered into the auction.

A preliminary report issued earlier this month indicated that more than 155GW of resources, both confirmed and unconfirmed, might be available, a 13pc jump from the 2014 auction.

The sizable increase surprised members of MISO's supply adequacy working group, given the grid's warnings that the region's once-ample generation reserves will shrink as large amounts of coal generation retire in the next few years rather than comply with tighter federal emission limits. MISO's upper midwest region is especially affected by retirements.

The update released this week showed 12.9GW of unconfirmed generation was included in the preliminary report. Of that amount, more than 11GW, or 86pc, is located in zones 8 and 9, the four-state MISO south region that covers Arkansas, Louisiana, Texas and Mississippi.

Confirmed capacity in zones 8 and 9 totals 31GW, below the reserve margin requirement of 33.2GW. Adding the additional unconfirmed capacity would yield a reserve margin of 26pc in the southern region.

No other MISO zone is facing a capacity shortfall with confirmed resources only.

MISO staff will continues to monitor unconfirmed generation so the actual figures will change before the auction.

MISO's 2014-15 resource auction cleared about 137GW of resources across the region's nine zones, from 146GW offered.

While regulated utilities supply much of their own supply, many companies use the capacity data as they plan bilateral contracts for the next year.

MISO has completed its review of fixed resource adequacy plans filed by utilities and other load-serving entities ahead of the auction.

Results of the planning resource auction will be released on 14 April.

Last year's auction resulted in three clearing prices. In zone 1, covering Minnesota, North Dakota and western Wisconsin, capacity cleared at $3.29/MW-day. In zones 2-7 including upper Michigan, eastern Wisconsin, Iowa, Missouri, Indiana, Illinois, Kentucky, and lower Michigan, prices cleared at $16.75/MW-day. In zones 8 and 9, covering Arkansas, Louisiana, Mississippi, and Texas, prices cleared at $16.44MW/day.

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