Statement of Commissioner James P. Danly
August 31, 2022
Docket Nos. ER22-496-000 and ER22-496-001
While I am not persuaded by the entirety of the Commission’s reasoning for rejecting Midcontinent Independent System Operator, Inc.’s (MISO) tariff revisions to implement a Minimum Capacity Obligation (MCO),[1] I share my colleagues’ concerns regarding the proposal’s potential impact on market power.[2] Nonetheless, I believe that these concerns might have been resolved with more information. I would have, therefore, preferred that the Commission set the matter for a paper hearing, consistent with FPA section 205(e),[3] to determine whether the tariff filing is just and reasonable. Given both the challenges associated with navigating MISO’s stakeholder process[4] and what appears to be MISO’s desperate need for reform of its capacity construct,[5] the fact that MISO can file another MCO proposal is, at best, cold comfort. However, even though I would have preferred that the Commission set the proposal for a paper hearing, I concur in the judgment because I agree that on this record, and without further development, MISO has not satisfied its burden to demonstrate that its tariff filing is just and reasonable.
I also note that the reasons presented as the basis for this proposal have furthered my misgivings regarding MISO’s capacity construct. Specifically, I am concerned by the increasing risk that MISO will be unable to retain sufficient dispatchable generation to ensure reliability and resource adequacy. With these concerns in mind, I urge my colleagues to consider Commission action pursuant to FPA section 206.[6]
For these reasons, I respectfully concur in the judgment.
[1] For example, whether the Commission is persuaded that the proposal accomplishes MISO’s goals is not the analysis under Federal Power Act (FPA) section 205. But see Midcontinent Indep. Sys. Operator, Inc., 180 FERC ¶ 61,142, at PP 107-109 (2022). The question, under FPA section 205, is whether the proposal is just and reasonable. See 16 U.S.C. § 824d.
[2] See Midcontinent Indep. Sys. Operator, Inc., 180 FERC ¶ 61,142 at PP 112-113.
[3] 16 U.S.C. § 824d(e).
[4] See Transmittal at 12-13 (describing the stakeholder process and stating that “MISO originally presented the MCO concept to stakeholders at the Resource Adequacy Subcommittee . . . in September 2020”).
[5] See id. at 2 (explaining that the “MISO Region is experiencing significant shifts in its generation portfolio due to resource retirement, increased reliance on intermittent resources and a corresponding reduction in excess capacity”); id. (agreeing with the North American Electric Reliability Corporation (NERC) in its Long-Term Reliability Assessment Report that “[t]o ensure reliability during the transition to greater reliance on wind and solar resources, emerging resource and energy adequacy issues must be addressed” and “[p]lanning for long-term resource adequacy is becoming increasingly complex with a resource mix that is more unpredictable and less energy-assured”) (quoting 2020 Long Term Reliability Assessment, N. Am. Elec. Reliability Corp. (Dec. 2020) at 7, https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2020.pdf).
[6] 16 U.S.C. § 824e.