MISO Mulls Increasing Offer Cap to $1,500/MWh
Concurrent with PJM Interconnection’s decision to double the cap on offers in its regional energy market to $2,000 per megawatt-hour (MWh), the Midcontinent Independent System Operator (MISO) announced on October 5 that it may increase its energy market offer cap from $1,000/MWh to $1,500/MWh this winter in anticipation of expected Federal Energy Regulatory Commission (FERC) action.
In Docket No. RM15-24-000, filed on September 17, FERC issued a Notice of Proposed Rulemaking (NOPR) addressing “Settlement Intervals and Shortage Pricing in Markets Operated by Regional Transmission Organizations and Independent System Operators.” As part of that proceeding, FERC indicated that future price formation action is expected, although it did not say when:“[…] The commission expects to undertake further action addressing various price formation topics, including offer price caps, mitigation, uplift transparency, and uplift drivers.”
At the meeting of the MISO Market Subcommittee on September 29, staff offered three interim energy offer cap options for the coming winter:
- Status Quo – Leave the cap at $1,000/MWh – Excess fuel costs are not recoverable with Revenue Sufficiency Guarantee (RSG);
- Repeat uplift-based solution from Polar Vortex winter 2014-15, with costs above the energy offer cap recovered using RSG; or
- Increase energy offer cap to $1,500/MWh.
The final option was preferred by the marketing team, at least for the immediate future. “Anything we do should not be considered permanent, given FERC’s pending action,” said Jeff Bladen, MISO’s executive director of Market Design.
The Market Subcommittee has scheduled its FERC filing for November 1, with an anticipated implementation date of January 1, 2016.
- 2015 Insider Knowledge
- 2016 Environmental Leader Product & Project Awards
- 10 Tactics of Successful Energy Managers
- Four Key Questions to Ask Before Your Next Energy Purchase
- Improve Occupant Comfort & Reduce Energy Costs Through Humidity Control
- Choosing the Correct Emission Control Technology
- The New Energy Future - Challenges and Opportunities in Corporate Energy Management
- Solar Request for Proposal (RFP) Guide
- Energy Manager Today Awards Top Products and Top Projects of the Year
- Strategies for a Successful EHS&S Software Selection