CMPAS Helps Utilities Meet Resource Adequacy Requirements
While line workers conduct live-line maintenance on utility lines and infrastructure, the Energy Market Services team of Chad Hanson, Ben Nelson, and Andy Ristau manage the daily CMPAS live interface to schedule energy and capacity for utility members and affiliates in the Midcontinent Independent System Operator and adjacent markets.
Load-serving entities (LSEs), such as your local municipal utility, are responsible for meeting resource adequacy or capacity requirements to serve customer demand or load on a continuous basis. As a registered MISO market participant and transmission owner, CMMPA/CMPAS helps utilities reduce cost by scheduling their energy and administering the Resource Planning Auction established by MISO.
Defining Energy and Capacity Requirements
• Energy: the capacity for doing work and is measured in kilowatt-hours.
• Capacity: the maximum power that can be produced by a generating resource at specified times under specified conditions.
In the context of wholesale electric markets, a capacity market is a mechanism that provides revenue to a power plant owner so long as the owner agrees to stand ready to supply power when needed. According to market rules, an electric power utility or LSE must purchase or own capacity to ensure a reliable supply of power during demand peaks (generally the hottest and coldest times of the year). The LSE always needs to have energy/"stacks of generation" to meet its load forecast and sufficient capacity to meet projected peak demand plus a reserve margin as determined by a regional reliability authority to “keep the lights on.”
CMPAS’s Energy Services Team Participates in MISO Stakeholder Discussions
Accredited Behind The Meter Generation (BTMG) assets exist as one of MISO’s resource adequacy tools and represents thousands of megawatts of capacity in its footprint. Several CMPAS utility members with diesel electric generators contribute to the BTMG resource mix and as a result, discussions and public policy regarding BTMG rules are of vital interest to CMPAS and its members.
In the 1990’s, CMPAS utilities and others installed diesel generators as a prerequisite for a power purchase agreement with Northern States Power (NSP). Today, these locally-owned diesel generators continue to bring value even though the NSP agreement has expired. Along with providing backup power to respond to local or regional emergencies and issues, these legacy generators serve as a hedge or insurance policy against capacity price volatility. They also give municipals more flexibility when negotiating energy-only power purchase agreements and making energy-only market purchases.
Recently there were discussions related to BTMG and the Planning Reserve Margin Requirement (PRMR) for utilities. For now, the calculations remain unchanged as MISO continues to use a utility’s expected coincidental peak and transmission losses to determine PRMR and BTMG capacity credit.
CMPAS’s Energy Services Team Takes Action
These discussions are ones that the CMPAS Energy Services team watches as they perform compliance reporting and market monitoring. The regional transmission organization (RTO) concept has been in practice for less than 20 years, and governance policies seem to always be in play. To help utility members remain price-competitive in this environment, CMPAS analyzes capacity prices, scrutinizes MISO calculations to determine the value of capacity credits, and examines public policy proposals.
A few years ago, the U.S. EPA issued confusing National Emission Standards for Hazardous Air Pollutants (NESHAP) for Reciprocating Internal Combustion Engines (RICE). The energy market services team researched and successfully filed comments with the EPA, helping to lessen the burden of the rules while keeping members informed of their compliance obligations. In response to the new rules, most members installed new emission control equipment such as catalytic converters, however, CMPAS believes the compliance investment to maintain the generators will continue to produce long term value in supplying power when called upon by MISO and the local municipality.
CMPAS’s Energy Services Team is focused on helping municipalities meet energy demands, especially during their peak seasons. To learn more about peak season capacity requirements and other energy regulations, contact CMPAS today.
Call Us: 507-526-2193