Commissioner Richard Glick Statement
February 28, 2020
Docket No. ER20-668-000
Concurring Regarding Midcontinent Independent System Operator, Inc.
I support rejecting Midcontinent Independent System Operator, Inc.’s (MISO) proposed revisions to Module D of its Open Access Transmission, Energy, and Operating Reserve Markets Tariff.1
MISO’s proposal would remove tariff provisions that exempt all Generation Resources that are not Planning Resources under Module E-1 of the Tariff (i.e., non-capacity resources) from physical withholding penalty charges in the day-ahead market. In their place, MISO would effectively make non-capacity resources subject to MISO’s physical withholding rules. I agree with my colleagues that MISO’s proposal casts too wide a net, putting certain non-capacity resources at risk of being penalized even when they lack market power and, therefore, have no incentive to withhold their capacity for the purpose of driving up prices.
Nonetheless, I share MISO’s and the Market Monitor’s concerns about the potential exercise of market power through physical withholding. The Market Monitor has observed what appear to be exercises of this type of market power by non-capacity resources in MISO over the past several years.2
Addressing the potential for market participants to exercise market power is critical and would not, in and of itself, require the imposition of a must-offer obligation on non-capacity resources.3
I write separately to encourage MISO, the Market Monitor, and stakeholders to continue to explore proposals to appropriately address and mitigate the potential for non-capacity resources to exercise market power through physical withholding.
For these reasons, I respectfully concur.
- 11 Midcontinent Independent System Operator, Inc., 170 FERC ¶ 61,170 (2020).
- 22 MISO Filing, Dr. David B. Patton Aff. Attachment C ¶¶ 31-35; id. ¶ 35 (“These four examples are just a sampling of the types of conduct that likely would have been investigated for physical withholding and possibly have been mitigated absent the exemption.”); see also MISO February 25 Answer at 8-9.
- 33 See Nevada Power Co., 153 FERC ¶ 61,206, at PP 47-48 (2015) (recognizing that physical withholding raises potential market power concerns that are, in effect, unique to market participants not subject to a must-offer requirement); id. (a market participant may be able to “strategically bid its resources such that the LMP does not reflect the economic unit, but rather reflects a unit the market participant selects to bid with potentially higher cost, to the benefit of its lower cost units. The same concern is not present for resources with must-offer requirements).