Transcript Document

Proposed Treatment of Alternative Capacity
Resources for the MISO Module E Tariff Update
Mike Shields
DTE Energy
November 20, 2007
Introductory Concepts
•
Module E – Resource Adequacy Requirements:
–
•
•
Module E section of MISO intended to define the resource requirements needed to ensure long term
reliability
Alternative Capacity Resource Definition:
–
Defined in MISO tariff as “Behind-the-meter (BTM) generation or Interruptible Load that satisfies the
criteria to be counted toward state or Regional Reliability Organization resource adequacy standards”
–
For this discussion all types of “Interruptible Load programs” are generically referred to as “Demand
Response Resources” (DRRs)
Purpose for Module E discussion:
–
Define minimum standards required for Alternative Capacity Resources to qualify in meeting a Load
Serving Entities (LSE) Resource Adequacy requirements (RAR)
–
Note that other sections of the MISO tariff define how Demand Response Resources can qualify and
participate in the:
•
•
•
–
Ancillary Services Market
Emergency Demand Response Schedule - resources that are utilized by MISO will get either the higher of their offer
price or the LMP
MISO’s Day-Ahead and Real-Time Energy markets as price sensitive demand offers
Included in this presentation are the concepts (as of 11/12/07) resulting from discussions within the
MISO Demand Response Working Group, the MISO Supply Adequacy Working Group, and the OMS
Resource Adequacy Working Group
2
Overview of Basic Principles
•
•
Load/Capacity Treatment for Resource Adequacy Requirements
(RAR)
–
Alternative Capacity Resources (ACRs) should qualify to receive credit either as a
load modifier or as the equivalent of a capacity resource, to be defined by the LSE at
the time of registration
–
ACRs must register their load reduction capability as part of the RAR registration
process – are not allowed to only show MISO reduced level of peak load
Designation as Network Resource:
–
Alternative Capacity Resources MAY be specified to be a Designated Network
Resource (DNR) as defined by the MISO tariff, but are not REQUIRED to be a DNR
•
Even if registered as a DNR, do not have to meet the DNR requirements to “MUST-OFFER”
into the MISO Day-Ahead and Real-Time Energy Markets (avoids certain issues with the use of
existing “legacy” DRR programs established under State Retail Tariffs)
•
ACRs that receive RAR credit MUST be available for use during a MISO Energy Emergency, as
defined under the MISO Emergency Operating Procedures
3
Overview of Basic Principles
(continued)
• It is important for Module E to define the minimum
qualifications for ANY DRR program to receive RAR credit
in a non-discriminatory manner
– The qualification requirements must be strict enough to ensure that
DRRs can be relied upon, but not so strict as to disadvantage DRRs as
compared to generation
• Minimum requirements defined at high level – much of the
detail is to be developed within a MISO Business Practices
Manual
– “The Transmission Provider shall develop procedures for accrediting,
testing, validating, measuring, and verifying all Demand Response
Resources” . . . and . . . “shall take into account any applicable State
regulatory or other non-jurisdictional entities requirements regarding
duration, frequency, and notification processes” for the DRR
programs.
4
Minimum Requirements for DRRs to get RAR Credit
1.
2.
DRR must be equal to or greater than 100kW (a grouping of smaller resources may qualify in
meeting this standard)
–
The 100kW level is consistent with the size criteria used in other RTOs
–
Grouping smaller resources together to meet these defined requirements is acceptable
DRR must be available to be scheduled for load reduction with no more than 12 hours advisory
notice
–
MISO unlikely to be able to provide notice/schedule prior to completion of the Day-Ahead and Forward
Reliability Assessment Commitment (RAC) model runs
3.
DRR should be able to ramp down to meet targeted load reduction level in no more than 2 hours
when provided schedule by Transmission Provider
4.
Once the targeted level of load reduction is achieved, resource must be able to maintain the
target level for at least 4 continuous hours
5.
The DRR must be capable of being interrupted at least 5 times during any planning year for
which RAR credit is given
–
For PJM the requirements are currently that the DRR resource be able to maintain the targeted reduction
level for at least 6 continuous hours, and must be capable of interrupted at least 10 times during the
planning year
–
MISO agreed to perform an analysis based on the use of MISO wide load shapes to determine if higher
values for these criteria might also appropriate for the MISO tariff
5
Minimum Requirements for DRRs to get RAR Credit
(continued)
6.
A DRR resource receiving RAR credit must be a resource that would have
otherwise been on line within the next 24 hour period (exceptions are made for
facilities down for periodic maintenance)
–
7.
This provision is intended to ensure RAR credit is being given to a resource still in
normal operation, and not for some facility that has shut down either indefinably or
for an extended period of time for economic reasons
Voluntary DRR programs (i.e., programs in which curtailment in an Energy
Emergency is an option and not a requirement) will NOT qualify for RAR credit
–
RAR is intended to improve the overall reliability of the MISO footprint. Voluntary
DRR programs may be useful in other aspects of the MISO market, but should not be
counted upon from a reliability perspective. Denial of RAR credit does not affect
qualification and participation in MISO’s energy and ancillary services markets.
6
Minimum Requirements for DRRs to get RAR Credit
(continued)
8.
There can only be one entity claiming the DRR RAR credit associated with
the load reduction capability of any specific end-use customer
–
9.
This is analogous to the prohibition on double-counting the same generation
resource. This may be of particular concern should third party entities sign up
customers already on existing retail interruptible rate programs. This concern
could be a major reliability issue in the event that these resources are called upon
during an Energy Emergency.
While DRR resources may make price sensitive offers into the MISO DayAhead or Real Time Energy markets, to receive RAR credit, these resources
must meet all the other requirements specified above, AND must have
provisions that allow them to be interrupted during MISO declared Capacity
or Energy Emergency regardless of the projected or real time energy
market LMPs.
–
The intent here is to prevent a DRR resource receiving RAR credit from offering
in a very high (up to $3500/MWh) offer price to protect that resource from being
interrupted
–
This is of particular concern in the current MISO market environment where DRRs
and certain non-dispatchable peaking units are not able to set the market LMPs
due to MISO model limitations
7
Behind-the-Meter Generation
• Two Categories of BTM Generation
– BTM generation interconnected under MISO Procedures and Agreements
– BTM generation Interconnected under State Regulatory Procedures and
Agreements
– Primary difference is that in the latter category, BTM generation can only be
committed for dispatch by MISO during Energy Emergencies (and thus qualify to
receive RAR credit) if allowed by State law and regulations
• MISO is to develop procedures to support the commitment and
dispatch of BTM generation
• If available, BTM Generation receiving RAR credit will be committed
by MISO during declared Energy Emergencies prior to the use of
operating reserves to meet the energy balance
8
Proposed Penalty Provisions for
Alternative Capacity Resources
•
Do not anticipate having the same level of Independent Market Monitor oversight for Alternative Capacity
Resources that exists for generating resources
–
•
•
This could be of particular concerns should “physical withholding” or similar types of issues arise during
Energy Emergencies for Alternative Capacity Resources that receive RAR credit
Proposed Penalties have two parts
–
The same financial penalties will occur that will apply under the proposed Emergency Demand Response
tariff Schedule – conceptually those load serving entities who had to pay a higher price because an
Alternative Capacity Resource does not show up when called upon by MISO will be “kept whole”
financially and the incremental cost will be assessed to the deficient resource
–
MISO will conduct an investigation (with the Load Serving Entity claiming RAR credit) as to the reason the
Alternative Capacity Resource was not available, and may disqualify that resource from receiving future
RAR credit as appropriate
–
In the event of a second instance (with at least a 24 hour separation) the resource does not show up when
called upon, that resource will automatically be disqualified from receiving future RAR credit
A number of “protections” have been built into the tariff language to avoid penalizing a Alternative Capacity
Resource that is unavailable for legitimate reasons. These include:
–
–
–
–
Resource unavailable for maintenance reasons
Resource previously reduced load for economic or local reliability reasons
Amount of expected load reduction not achieved due to improper temperature-adjusted expectation
Resource unavailable for reasons of force majeure
9
Questions ?????
10
Biography
Michael W. Shields
Manager – Regulatory Affairs, Wholesale Market Developments
DTE Energy
- Currently serve as a primary liaison to the Midwest ISO on market related issues, and serve
as a witness covering MISO and Transmission related costs in State Regulatory Proceedings.
Have worked for DTE Energy/Detroit Edison for 29 years. Recently was elected to Chair the
MISO Market Subcommittee stakeholder group.
- In past DTE positions:
• Was responsible for the sale and purchase of long-term (one-month or longer) energy and
capacity for Detroit Edison
• Was responsible for the development of fuel cost and emissions forecasts in support of
Power Supply Cost recovery proceedings, and for the purchase of emissions allowances
• Developed Integrated Resource Plans for Detroit Edison
• Worked as a Startup Engineer at the Fermi 2 Nuclear Site
- Prior to joining Detroit Edison, worked for five years as a Startup Engineer at the Brunswick
Units 1 and 2 Nuclear Stations (for Carolina Power & Light)
- Education:
• Bachelor of Science, Nuclear Engineering - North Carolina State University
• Masters of Business Administration – University of Michigan, Ann Arbor
11