Next Steps • Discuss problem definition and evaluation criteria at the Market Subcommittee • Identify and assess potential alternative approaches • Develop, test and discuss a Forward Market Mechanism proof-of-concept results with stakeholders RESOURCE ADEQUACY CONSTRUCT (8760) MISO is evaluating whether the current resource adequacy construct is sufficient to address reliability risks throughout the year now and in the years to come. Several factors contribute to this exploration, including planned and forced outages; the changing resource mix due to retirements and addition of more variable energy resources; net scheduled interchange volatility; and extreme weather events. Historically, MISO's approach to resource adequacy has focused on ensuring that sufficient resources would be available when demand peaks in the summer--with the expectation that serving load the rest of the year would be comparatively easier. But given the increase in MaxGen emergencies in the last three years in nonsummer seasons, MISO is now evaluating whether a summer focus continues to make sense. As part of that evaluation, MISO is looking into several traits of the current construct such as the granularity, risk metrics, PRA auction design, reliability requirement, and market signals. There has been growing concern that the current construct is missing risks outside the summer timeframe. During the last three years, only one of the 10 total MaxGen emergencies has occurred in the summer. Because of this, MISO is evaluating whether a more granular construct could help provide visibility into risks throughout the year to ensure reliability during all time periods. One option would be a seasonal construct, which has the potential to match reliability requirements to specific seasons and provide the flexibility for resources to participate in the PRA in times best suited for each resource. In addition to the granularity of the resource adequacy construct, MISO is looking at the risk metrics used in establishing the PRM and Local Reliability Requirements. The industry standard used by MISO has been a loss of load expectation(LOLE) of one day in 10 years (0.1 days/year). However, given the changing resource mix and increase in variable energy resources, MISO will evaluate if the LOLE metric sufficiently reflects risk, especially across all hours of the year. There may be a need to augment the LOLE metric or consider alternatives. Expected Unserved Energy (EUE) is one alternative metric for assessing reliability risk, which has some support from others in the industry and from several stakeholders. EUE is expressed as the expected number of megawatt-hours of load that will not be served in a given time period. One reason it may be useful compared to LOLE is as storage and other variable energy resources become more prominent in the MISO portfolio, EUE has the ability to measure those attributes. There are additional alternatives worthy of consideration and MISO is evaluating those as well As MISO moves into the future, it will be essential to utilize the proper risk metric to determine reliability criteria and requirements. The reliability risk metric is not the only crucial component to accurately capture risks. Improved modeling is something MISO continuously strives to achieve and is directly linked to accreditation as shown in the feedback loop graphic. 14
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