Latest MISO Capacity Auction Highlights Difficulties of Managing Energy Transition

Midcontinent Independent System Operator (MISO)¹ released the results of its 2022-2023 Planning Resource Auction on April 14, 2022. The results were noteworthy for several reasons, including that:

(1) the prior small surplus is now a projected 1.3 GW shortfall due to (a) an increased load forecast, (b) generation retirements and (c) decreased accredited capacity of new additions (namely, renewable variable additions compared to thermal retirements, which was only partially offset by dispatchable gas capacity), with the shortfall centered in MISO’s load-dense North/Central zones; and

(2) capacity prices for a majority of MISO’s zones increased 47-fold from $5/MW-Day to $236.66/MW-Day and the other zones increased from $0.01/MD-Day to $2.88/MW-Day.

While these results mostly reflect necessary “point-in-time” assessments that can (and do) change, the report’s findings include warnings of an “increased risk of needing to implement temporary, controlled load sheds” in order “to prevent uncontrolled, cascading outage.” MISO also acknowledges that the accredited capacity gap is widening and presents a growing challenge to manage.

¹ MISO is an independent, not-for-profit, member-based organization responsible for operating the power grid across 15 US states and the Canadian province of Manitoba. MISO’s 471 market participants, including 56 transmission- and 128 non-transmission-owning members, serve 42 million people who depend on MISO to generate and transmit the right amount of electricity every minute of every day. MISO manages one of the world’s largest energy and operating reserves markets with $22 billion of annual gross market charges in 2020.