DER - Solar

FERC balks at MISO’s plea to push Order 2222 implementation

FERC balks at MISO’s plea to push Order 2222 implementation
(Federal Energy Regulatory Commission )

FERC has finally responded to MISO’s Order 2222 proposal, which was filed in April 2022. On most requirements, FERC found MISO partially complied, including the 2030 implementation date. MISO persuaded FERC that Order 2222, the requirement to allow some distributed energy resource aggregators to participate in wholesale markets, must be implemented after the market platform is improved but was less persuaded by MISO’s argument that multiple configuration resource upgrades provided both reliability and economic benefits.

While MISO and MISO transmission owners could seek a rehearing request on the 2030 date partially complied finding, the distributed energy resource providers might find FERC’s acceptance of MISO’s double counting proposal troubling.

MISO may seek a 6-month extension to comply with FERC’s October 10 decision because FERC found that MISO has not demonstrated that multi-nodal aggregation cannot work.

PODCAST: Scale Microgrid Solutions co-founder and COO Tim Hade joined Episode 34 of the Factor This! podcast to discuss scaling a cleantech hardware company, microgrids, and the role of distributed energy resources in the energy transition. Subscribe wherever you get your podcasts.

FERC found that MISO’s proposed 2030 implementation date partially complied

FERC found that MISO partially complied with the effective date requirement because MISO proposed Order 2222 implementation after the market systems enhancement project. However, FERC found the effective date is not timely because MISO deferred the implementation date for Order 2222 by several years.

The biggest heartburn in MISO’s proposal is the 2030 implementation date when both MISO staff and Organization of MISO States (OMS) staff indicated a timeframe around 2026-27 is possible during the stakeholder discussions leading up to February 2022, two months before MISO’s filing date. However, MISO suddenly announced the 2030 implementation date and brought up the Multiple Configuration Resources (MCR) market upgrade to push the implementation to 2030. That the 2030 date shocked most MISO stakeholders is probably an understatement. No other grid operator has proposed an 8-year lead time to implement FERC Order 2222.

FERC turned around MISO’s argument that reliability and economic benefits accrue from MCR upgrade and said implementing Order 2222 sooner would provide the same benefits.

DISTRIBUTECH International 2024 will dive into DERMS adoption and full-market participation for DERs in Orlando, Florida Feb. 24-26, 2024.

MCR is a non-FERC-mandated market upgrade and is, certainly, not driven by either the MISO Board or the Independent Market Monitor. The key persuasive argument for FERC appears to be the OMS protest. OMS questioned how MISO prioritized MCR ahead of Order 2222. Many organizations protested MISO’s long implementation date, including the Advanced Energy Management Alliance, Advanced Energy Economy jointly with the Solar Energy Industries Association, and Public Interest Organizations. Several state commissions, including Indiana, Michigan, and Illinois, commented in favor of an earlier implementation date. Only MISO transmission owners supported MISO’s long implementation date.

Transmission lines outside Houston, Texas (Courtesy: BFS Man/Flickr)

Before calling out MISO on the 2030 implementation date, FERC agreed with MISO’s reasoning to prioritize Order 2222 after the Market Systems Enhancement (MSE) project. So, Order 2222 will be implemented on MISO’s new market platform, not the current legacy platform.

But there is a risk here for DER providers. If MISO pushes out the MSE project implementation, that could impact Order 2222 implementation because MISO convinced FERC that a new market platform is needed to integrate aggregated DERs, and FERC accepted that argument.

FERC found that MISO did not comply with its locational requirement

FERC said MISO has not demonstrated that “it is not technically feasible for DERs to aggregate across a broader geographic area than a single node, at least for some nodes or groupings of electrical facilities that have similar impacts on the same transmission constraints.” FERC took the same study that MISO referenced to make the case that multi-nodal is not possible and said broad aggregation is possible because, in the study that MISO quoted, there is indeed a possibility of grouping nodes with the same real-time distribution factors to manage real-time congestion. That last point about the inability to manage real-time congestion under a multi-nodal aggregation was MISO’s technical reason, which FERC turned around its head and said that the study showed it is possible to aggregate some MISO nodes and that aggregation can also improve MISO market engines computational efficiency.

Interestingly, FERC didn’t reference the CAISO Load Aggregated Points (LAP) model for multi-nodal and referred MISO to its study. To comply with FERC’s directive on this multi-nodal aggregation, MISO must either develop a new study or revise that referenced study. Some MISO transmission owners could file a rehearing request on this single nodal topic. However, FERC is unlikely to accept a rehearing or a request for clarification because FERC explicitly indicates it is possible to aggregate some MISO nodes using the same study that MISO referenced. So, MISO must propose multi-nodal aggregation.

FERC found that MISO partially complied with two-thirds of Order 2222 requirements

There are 18 parts of MISO’s proposal, out of which FERC accepted only 27% and rejected the one part about locational requirements, which meant FERC found MISO partially complied with the majority of its 2222 requirements.

MISO’s 2030 implementation date and multi-nodal aggregation are not the only aspects of MISO’s proposal that FERC partially accepted and rejected. But before dwelling on those partially complied aspects, it is worth noting that FERC found MISO complied with allowing different types of technologies to participate in aggregation, double-counting requirements, minimum and maximum size requirements, distribution utility review triggered by the market registration process, and modifications to the list of DERs in an aggregation.

Surprisingly, FERC accepted MISO’s double-counting proposal even though AEMA protested that MISO did not address net energy metering or interruptible load in its proposal. FERC was persuaded by MISO’s argument that “these resources will neither be able to provide wholesale energy nor be compensated for energy in MISO markets, in part to avoid double counting.” MISO’s proposal on double counting depends on Load Serving Entity (LSE)/Electric Distribution Company (EDC) and state regulatory agency review. MISO permits these organizations to review for double counting before MISO market registration. This net energy metering could be a rehearing or request for clarification that DER providers might seek because MISO’s proposal does not address co-located NEM resources, which is a major issue in PJM’s September 1 filing.

MISO control room. Credit: MISO Energy

MISO’s list of where it “partially complies” is longer than where it “complies.” MISO has much work to do with its stakeholders in the next few months. Wherever FERC partially accepted MISO’s proposal, there is room for stakeholder feedback and a revised MISO proposal. This “partially complies” list indicates that MISO might need a 6-month extension to respond to this FERC decision.

MISO’s interconnection proposal for DERs, eligibility requirements, metering and telemetry requirements, multiple aspects with locational requirements, operational coordination requirements, alternate dispute resolution requirements, and market participation agreements fall under this “partially complies” category. Hence, MISO and its stakeholders have their work cut out for the remaining few months.

FERC rejected MISO’s proposed threshold of greater than 10 MW for market power mitigation measure because it was outside the scope of this proceeding.

Next steps

MISO might seek an extension beyond the 60 days required to respond to FERC’s decision. When PJM received the FERC decision on March 1 this year for its 2222 proposal, PJM made the case, and FERC accepted that it needed time to work with its stakeholders. In PJM’s example, PJM had requested a 6-month extension and filed a proposal with FERC on September 1. So, that’s one way for MISO to respond to this FERC’s decision. That would mean April 10 would be the due date instead of December 10 for MISO to file its revised compliance proposal if FERC accepts MISO’s extension request and if MISO makes that request.

However, according to some reports, unlike PJM’s 2222 filing, FERC may not have a commissioner quorum by the end of this year. It is unclear how much the quorum impacts an order from FERC. The good news is that there is a record now that FERC has acted on MISO’s 2222 compliance filing, and that record indicates that FERC was not sold on the 2030 implementation date.