On February 28, 2011, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) conditionally accepted in part updates to the Midwest Independent Transmission System Operator, Inc.’s (“Midwest ISO”) Open Access Transmission, Energy, and Operating Reserve Markets Tariff (“tariff”) that created a new category of resources named Dispatchable Intermittent Resources. This new category will allow wind to be treated like other power resources and participate in the region’s real-time energy market. Thus, the new category of resources will be able to set market prices and receive real-time make whole credits. The new changes will be in effect as of March 1, 2011, which will permit new wind Dispatchable Intermittent Resources (“DIRs”) to begin participating in MISO markets as of June1, 2011.
Since renewable generation is intermittent, the Midwest ISO did not historically give those resources dispatch instructions. On November 21, 2010, the RTO proposed a way of implementing parity between traditional generation resources and intermittent resources. The Midwest ISO proposed an initial two-year transition period, and after that, all intermittent resources must register as a DIR. There will be exemptions permitted for DIRs that have a commercial operation date before April 1, 2005. Also, exemptions will be granted for qualifying facilities, an interconnected Network Resource Interconnection Service, a designated Network Resource, or resources governed by a long-term firm point-to-point transmission service agreement.
FERC approved the Midwest ISO’s proposal for wind, but the Commission rejected forcing other types of intermittent generation to register as DIRs since the proposal focused primarily on wind. The Commission said that the Midwest ISO did not address the cost for non-wind resources in changing categories, nor did the RTO explain why it was even necessary for non-wind resources to become dispatchable. The Commission is requiring a thirty day compliance filing to show tariff revisions that:
1. allow non-wind resources to remain Intermittent Resources, unless they choose to change categories;
2. DIRs are prohibited from later changing back to an Intermittent Resource;
3. exempt Intermittent Resources from having to install dispatch equipment; and
4. define “Commercial Operation Date.”
The Commission also directed the Midwest ISO to submit a compliance filing within thirty days that would explain:
1. how the current tariff provisions for Generation Resources will specifically apply to the new resource category;
2. the Midwest ISO’s forecasting process;
3. the methodology for determining default Forecast Maximum Limits; and
4. the proposed tariff language for Forecast Maximum Limits.
Further, the Commission asked for a one year compliance filing to analyze the acceptance and impact of an eight percent tolerance band for DIRs that have been applied an excessive/deficient energy deployment charge. FERC did also accept the allocation of the Revenue Sufficiency Guarantee charge to DIRs, but it rejected the deletion of tariff language for the real-time Revenue Sufficiency Guarantee Constraint Management Charge because they are not related to Dispatchable Intermittent Resources. Finally, FERC agreed that DIRs should not provide operating reserves, but the Commission asked for a year compliance filing to re-evaluate the issue.
A full copy of the FERC order is available at www.ferc.gov and here.