Dive Brief:

  • The Midcontinent Independent System Operator on Thursday asked federal regulators to approve a capacity accreditation methodology that aims to better account for how much different resources bolster grid reliability during stressed periods.

  • MISO plans to begin using the direct loss of load, or DLOL, -based capacity accreditation methodology for the 2028/29 planning year, but intends to release indicative results as soon as possible to give stakeholders time to adjust their long-term resource planning and retirement decisions, the grid operator said in its proposal with the Federal Energy Regulatory Commission.

  • MISO said its proposal addresses growing reliability risks driven by various factors including increasing demand and shrinking reserve margins. “The changing resource mix combined with extreme weather and shifting load profiles have created what the [North American Electric Reliability Corp.] has characterized as a ‘hyper-complex risk environment,’” MISO said.

Dive Insight:

Grid operators — such as the Southwest Power Pool, PJM Interconnection and ISO New England — have been making changes to how they measure capacity in efforts to ensure they have adequate resources to maintain grid reliability.

MISO’s proposal, developed through a two-year stakeholder process, is part of its Resource Availability and Need initiative, which led to plans to revise the grid operator’s demand curve used to set capacity prices, and a shift to a seasonal capacity framework.

MISO’s two-step proposal blends probabilistic and historic approaches. 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 analysis, the grid operator said. In the second step, MISO will use historical resource-specific performance during hours when capacity was tight over the previous three years.

“The DLOL-based methodology balances a range of reliability risks in the planning and operations horizons by incorporating forward-looking probabilistic analysis and measuring a resource’s performance during recent periods of high system risk,” MISO said.

Potomac Economics, MISO’s market monitor, supports the proposal. “Establishing accreditation that is accurately aligned with reliability will ensure that the capacity market provides efficient incentives to invest in and maintain a portfolio of resources that meet the reliability needs of the MISO system,” David Patton, president of Potomac Economics, said in an affidavit included with MISO’s application.

Intermittent generation — such as wind and solar — provides MISO with less and less reliability as more comes online because it lacks key attributes provided by dispatchable resources, Patton said.

“Resources with essential attributes or attributes that are in short supply will receive relatively high accreditation levels while those lacking such attributes that provide little marginal reliability value will receive lower accreditation,” he said.

The proposed accreditation framework will send clear signals to utilities and state regulators on what kinds of resources the grid needs, according to Patton.

Also, it will likely “substantially” change MISO’s expectations for what resources will be on its system in the future, altering its outlook for new transmission, Patton said.

MISO told FERC the grid operator needs to put its proposal in place in three years — and not longer, as some stakeholders asked for. About 50 GW of planned generation has cleared MISO’s interconnection process, including 32 GW of solar, according to the grid operator.

“If these resources start coming online at a much faster pace than the historical trend, MISO may experience shifting risk profiles much earlier than current expectations,” the grid operator said.

MISO operates the grid and wholesale power markets across 15 midcontinent states and Manitoba, Canada.