MISO's inability to manage generation outages a factor in January price spike: IMM

Houston (Platts)--15 Feb 2018 237 pm EST/1937 GMT

The Midcontinent Independent System Operator's lack of authority to manage resource outages played a big role in the MISO South Region's maximum generation event and high power prices in January, the independent market monitor said Wednesday.

During a meeting of the Entergy Regional State Committee, a group of regulatory representatives from MISO South's footprint of Arkansas, Louisiana, Mississippi and Texas, David Patton, president of Potomac Economics, MISO's IMM, noted that MISO South's load-weighted average power prices in January were the highest they've been in more than two years.

Tag Short, director of the MISO South Region operations, acknowledged that on January 17, when the cold snap was at its most frigid, almost 9.5 GW of MISO South's capacity was in forced outage, about 4 GW was planned and 3.6 GW was derated.

"When it gets to 7 degrees Fahrenheit in Little Rock [Arkansas], you are susceptible to air lines freezing, water lines freezing," Short said. "Expect things to trip off during the night, and that's exactly what happened."

MISO South peakload topped its internal capacity January 16-18, Patton noted, which meant that power had to be imported from other regions.

Much of that power came across the transmission system from MISO's North and Central regions, Short said, but other systems supplied power, as well, although they, also, were calling for consumers to conserve energy during the peak of the cold snap.

MISO deployed load-management resources -- a type of demand response -- "which MISO almost never does," Patton said.

"On those days, they got a response, but it was so delayed that it didn't help very much," Patton said.

Patton noted that the situation reinforced his recommendation that MISO expand its authority to manage outages, because during shoulder months, when planned outages are greatest, MISO has faced reliability risks that could be mitigated by greater control of planned outages.

For the month of January, more than 10% of MISO South's capacity was in planned outage, compared with about 8% in January 2017 and about 4% in January 2016, according to Patton's written presentation.

Patton also advocated establishing a 30-minute operating reserve product in MISO South, which has a relatively large number of independent power producers.

"If they start retiring because we're not valuing reliability, ultimately those costs start to go up and up," Patton said.

--Mark Watson,

--Edited by Annie Siebert,

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