On March 28, 2024, the Midcontinent Independent System Operator, Inc. (“MISO”) submitted a filing to the Federal Energy Regulatory Commission (“FERC”) proposing revisions to its Open Access Transmission, Energy and Operating Reserve Markets Tariff (“Tariff”) to implement a direct loss of load (“DLOL”) based accreditation methodology. The DLOL methodology will be used to accredit resources for MISO’s annual Planning Resource Auction and to determine a load serving entity’s resource adequacy for each season during the applicable year. According to MISO, the proposal will better account for how different resources bolster grid reliability during stress periods. MISO requests that the tariff revisions take effect on September 1, 2024.
MISO’s proposal is the culmination of a two-year stakeholder process and is part of its ongoing Resource Availability and Need (“RAN”) initiative, which is aimed at mitigating resource planning inadequacies. According to MISO, the RAN initiative is needed to address reliability risks resulting from a changing resource mix, extreme weather, increasing demand, and shrinking excess reserve margins.
MISO proposes to begin using a two-step DLOL-based capacity accreditation methodology for the 2028/2029 planning year following a three-year transition period that will start on September 1, 2024, to produce resource class-level indicative results. MISO intends to release the indicative results as soon as possible to give stakeholders time to adjust their long-term resource planning and retirement decisions. MISO states that this proposal will address growing reliability risks driven by various factors, including increasing demand and shrinking reserve margins.
MISO’s filing presents a two-step approach that will measure resources’ availability when reliability risk is greatest, based on prospective and retrospective risk assessments. In the first step, MISO will measure a resource’s expected marginal contribution to reliability using resource class-level performance during a loss of load expectation (“LOLE”) analysis. The LOLE analysis includes a Monte Carlo probabilistic simulation using 30 years of correlated load and weather data for each of five load forecasts that incorporates economic uncertainties and associated probabilities into the forecasts. In the second step, MISO will use a historical resource-level deterministic approach during tier 1 and tier 2 resource adequacy hours currently employed under MISO’s Tariff to accredit individual resources within their respective resource class. MISO asserts that the DLOL-based methodology balances a range of reliability risks in the planning and operations horizons by incorporating forward-looking probabilistic analysis and measures resource performance during recent periods of high system risk. Additionally, MISO submits that its proposed approach to measure the availability of resources during critical hours in its probabilistic analysis is within the marginal effective load carrying capability accreditation framework that is used by other markets administrators, such as PJM Interconnection, L.L.C. and New York Independent System Operator, Inc.
Interventions and protests are due April 29, 2024. MISO’s filing in Docket No. ER24-1638 can be accessed here.
