needs. MISO’s IMM and stakeholders have questioned whether prices during MaxGen emergencies reflect the scarce conditions declared by MISO so as to properly incentivize needed resource availability, avoid uplift from reliability commitments, and incent market participants to take other actions that would improve the supply-demand balance. MISO continues to look for ways to inform and enhance markets to align with desired operational outcomes. MISO pioneered the ramp product, ELMP pricing, and emergency pricing which aims to avoid price suppression by using the highest available offer when pricing emergency resources. Going forward, MISO will continue to pair solid theoretical market pricing approaches with enhancements that are expected to incent needed Market Participant behavior during times of scarcity. MISO’s pricing design must provide efficient incentives for adjustments to interchange with its market and non-market neighbors. In recent years, MISO has become a significant net importer but most of the interchange is submitted as fixed schedules and is not explicitly committed through economic market mechanisms in either the DA or RT markets. Changes in net schedule interchange (NSI) during emergencies can supply needed megawatts to meet MISO load and maintain reserves, but reductions in NSI can also lead to reserve shortages and reliability challenges if the MISO market design does not send an efficient price signal for import supply. In addition, the Net Scheduled Interchange scheduling process can create uncertainty about capacity sufficiency when making reliability and market commitments. This impact of uncertainty regarding future levels of NSI on commitment decisions has contributed to low prices during MaxGen emergencies and significant amounts of uplift. Next Steps • Enhance emergency pricing outcomes • Assess the shape and ceiling of the Operating Reserve Demand Curve including estimates of the Value of Lost Load • Decide whether/how to better optimize interchange between RTO and non-RTO regions Misalignment Between NSI and Regional Price Differences 700 600 500 400 300 200 100 0 -100 1 3 5 7 9 11 13 1/30/2019 17 15 17 19 21 23 1 3 5 7 9 11 13 1/31/2019 15 17 19 21 23 * PJM & MISO Price Vs NSI Real-Time LMP Difference Real-Time NSI with PJM RT LMP Difference $/MWh
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