Docket Nos. ER23-1195-001, EL23-28-000
PHILLIPS, Chairman and CLEMENTS, Commissioner, concurring:
We concur in both of today’s orders relating to the ability of Dispatchable Intermittent Resources (DIRs) to provide ancillary services in the Midcontinent Independent System Operator, Inc. (MISO), but write separately to emphasize the narrow, fact-bound nature of these decisions.
Today’s orders depend upon the particular factual circumstances before us, that unlike non-DIRs, DIRs are highly unlikely to be able to provide ancillary services when they are cleared. These circumstances underlie both the determination that DIRs are not currently similarly situated to non-DIRs when providing operating reserves and ramp products, and the determination that allowing DIRs to clear in the ancillary services markets would present a reliability issue. Solar Energy Industries Association (SEIA)’s complaint focuses on the alleged harms of excluding DIRs from providing these services, but do not demonstrate how this leads to unjust and unreasonable or unduly discriminatory rates given that—like with Up Ramp—the record suggests that DIRs would be undeliverable the vast majority of the time that they would clear. It has therefore failed to meet its burden under section 206 of the Federal Power Act. For these same reasons, we also agree with today’s order accepting MISO’s proposed tariff revisions, which preclude DIRs from providing Ramp Capability Products, as just and reasonable and not unduly discriminatory or preferential.
Nonetheless, the dynamic presented in today’s orders could well change in the future as the penetration of DIRs increases. In our view, the Commission’s findings here hinge, in significant part, on MISO’s demonstration of a near perfect overlap between DIRs’ undeliverability and the circumstances when DIRs would clear ancillary services. Should DIRs become significantly and demonstrably more likely to clear ancillary services when they are deliverable, a tariff that fails to allow DIRs to provide those services could be rendered unjust and unreasonable and unduly discriminatory or preferential. While complainants and protesters have suggested that current market dynamics are likely to change as the penetration of DIRs increases and as Hybrid Resources become more prevalent, and have also provided some limited evidence supporting these general suggestions, they have not demonstrated with specificity how and when such a shift in market dynamics may happen.
Nevertheless, we strongly urge MISO to continue to improve and enhance the software on which its markets rely. Both MISO and the Commission recognize the limitations of MISO’s current software, and the record suggests that these shortcomings are contributing to problems that go beyond DIR integration alone.
In general, MISO’s software ignores transmission constraints when selecting resources, both DIRs and non-DIRs, to provide ancillary services, thus ignoring instances when they are not deliverable. These limitations have three primary adverse consequences. First, if resources are cleared to provide ancillary services despite the fact that they are not deliverable and thus cannot be deployed, this can threaten reliability and unnecessarily trigger shortage conditions. Second, the limitations impair the ability of MISO’s Day-Ahead and Real-Time Markets to accurately price ancillary services because clearing resources that are not in fact deliverable gives rise to poor price formation and out-of-market actions (e.g., uplift costs). Third, MISO’s proposed “work around” to address the limitations—implementing a manual process for non-DIRs and prohibiting DIRs from offering ancillary services—allows non-DIRs to offer ancillary services but not DIRs, when both are technically capable of offering those services to the market.
The record before the Commission today lacks robust information concerning the first two of these adverse consequences. And as discussed above, the third consequence has not been demonstrated to currently cause the tariff to be unjust and unreasonable, but that is likely to change as DIR penetration increases. Accordingly, MISO’s current ancillary services market clearing software merits the Commission’s continuing attention going forward.
The positive subtext coming out of these proceedings is of an influx of important new resources that, in the near future, may be able to provide significant amounts of ancillary services in MISO and other markets. We anticipate the continued development of these resources and encourage MISO to be ready for them as they come online.
For these reasons, we respectfully concur.
Willie L. Phillips
 MISO defines a DIR as “[a] Generation Resource whose Economic Maximum Dispatch is dependent on forecast-driven fuel availability.” Tariff, Module A, § 1.D (Definitions – D); see Midcontinent Indep. Sys. Operator, Inc., XX FERC ¶ 61,XXX, at P 2 n.4 (2023) (2023 DIR Order); Solar Energy Indus. Ass’n v. Midcontinent Indep. Sys. Operator, Inc., XX FERC ¶ 61,XXX, at P 3 n.8 (2023) (Complaint Order).
 See MISO Deficiency Letter Response, Docket No. ER23-1195-0001, at 2 (explaining that, for DIRs, 99.7% of the MWh cleared to provide Up Ramp were economically undeliverable, compared to 31.0% for non-DIRs); see also Potomac Economics Comments, Docket No. ER23-1195-000, at 3 (“While other resource types may sometimes be undeliverable, DIRs are virtually always undeliverable when scheduled to provide the ramp up product.”); see also MISO April 21 Answer, Docket No. EL23-28-000, at 9 (“DIRs would only clear for ancillary services when the system is constrained, ultimately resulting in the DIR being unable to deliver the ancillary service it was cleared to provide.”).
 Complaint Order, XX FERC ¶ 61,XXX at P 50; 2023 DIR Order, XX FERC ¶ 61,XXX at PP 64-65.
 Complaint Order, XX FERC ¶ 61,XXX at PP 46-47.
 Id. P 43.
 There is reason to believe this could occur in the not-too-distant future. See Clean Energy Coalition Protest, Docket No. ER23-1195-000, at 11, 13 (By MISO’s own estimates, once renewable generating resources make up somewhere between 30-40% of MISO’s grid, “region-wide renewable generation availability surpasses 100% of load for a few hours of the year.” MISO’s “2022 RRA indicates that MISO will reach this inflection point sometime between 2027 and 2030.” At this point, the incentives for solar and wind DIRs to offer energy will shift.); see also SEIA Complaint, Docket No. EL23-28-000, at 28-29 (In ERCOT, “wind and solar can provide their ancillary services to the grid and make revenue. For example, in 2017, studies have shown that the day-ahead price of regulation down service surpassed that of energy for 9.2% of hours, the day-ahead price of regulation up service surpassed energy for 5.8% of hours, and the combined price for day-ahead regulation service was higher than the cost of energy for 16.4% of hours.”).
 Hybrid Resources can register as DIRs. See Tariff, Module C, § 40.2.5 (providing offer rules “for a Hybrid Resource registered as a [DIR].”). Although SEIA and protestors express concerns about Hybrid Resources in their pleadings, they have not provided specific information or analysis demonstrating that MISO’s prohibition on DIRs providing ancillary services prevents Hybrid Resources from clearing ancillary services when deliverable. In contrast, MISO has explained that it currently allows Hybrid Resources to be modeled and offered separately as co-located resources and that the storage component of such Hybrid Resources “will be eligible to provide the Ramp Capability Products, but MISO’s proposal would deem the DIRs ineligible to provide the Ramp Capability Products.” MISO April 14 Answer, Docket No. ER23-1195-000, at 20-21. Therefore, although it is unclear the extent to which this framework enables Hybrid Resources from providing their full potential of ancillary services, neither SEIA nor protestors have identified specific circumstances during which a Hybrid Resource would be precluded from providing ancillary services when deliverable.
 Complaint Order, XX FERC ¶ 61,XXX at P 19 & nn.44-45; id. P 23 & n.63.
 MISO Deficiency Letter Response, Docket No. ER23-1195-001, at 3-5.