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Commissioner Tony Clark Statement
August 12, 2013
Docket No. ER11-4081-001

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Order Initiating Briefing Procedures on MISO Resource Adequacy Order

“MISO’s resource adequacy construct is intended to promote regional reliability in concert with the local planning processes that have been used for years to meet resource adequacy needs in the Midwest. I am concerned that a minimum offer price rule (MOPR) in MISO could undermine these local planning processes and unwind the design changes recently accepted by the Commission in the Resource Adequacy Order.

“In their requests for rehearing, Potomac Economics and Capacity Suppliers dispute the Commission’s finding that most load serving entities (LSEs) in MISO would not have an incentive to exercise buyer-side market power. They base their argument on data showing that utilities obtain a portion of their resource adequacy needs through bilateral purchases. This is no revelation, however. The Commission has already acknowledged in this proceeding that resource planning in MISO is largely based on bilateral arrangements. I see no reason to initiate briefing procedures based on this less-than-compelling information.

“My concern is that reopening the MOPR issue on rehearing could ultimately lead to changes that decrease the flexibility of MISO’s resource adequacy construct. The Commission recognized this tension in the Resource Adequacy Order when it found that certain elements of MISO’s resource adequacy construct, including the opt-out provision, would not allow for an effective MOPR.

“Yet, this flexibility is necessary for maintaining the balance between state and regional resource planning processes in MISO and it would be inappropriate to upset this balance by injecting Eastern RTO capacity market principles into it. In upholding the voluntary nature of the capacity auction, the Commission previously recognized that this feature allows LSEs and their regulators to maintain significant flexibility when developing resource plans based on their specific region. Retaining this flexibility is a core issue for states in the MISO region. MISO’s footprint is overwhelmingly composed of state-regulated, vertically-integrated utilities subject to integrated resource planning regimes. This regulatory framework places MISO in a different position than Eastern RTOs that are substantially relying on capacity markets, and administrative constructs such as a MOPR, to produce accurate price signals for resource development needs.

“Given the seemingly poor fit of a MOPR in the MISO region, and lacking a compelling rationale for rehearing, I cannot support the decision to initiate briefing procedures. Circumventing the stakeholder process by reopening the MOPR issue in this narrow context interjects unnecessary uncertainty into MISO’s resource adequacy construct at a time when the region is still adapting to the major design changes just recently approved. If market participants believe a MOPR will further the ability for the region to meet its resource adequacy needs, then they should bring these issues to the MISO stakeholder process where interested parties can comprehensively consider MOPR related issues.

“For these reasons, I respectfully dissent from today’s order.”


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Updated: August 13, 2013