[Federal Register Volume 77, Number 81 (Thursday, April 26, 2012)]
[Notices]
[Pages 24950-24952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-10064]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. ER12-678-000; ER12-679-000]


Midwest Independent Transmission, System Operator, Inc.; 
Supplemental Notice of Technical Conference

    As announced in the Notice of Technical Conference issued on April 
4, 2012, and as required in the Commission's March 30, 2012 order in 
these dockets,\1\ there will be a technical conference in these 
proceedings on May 15, 2012 at the Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC, Room 3M-2A&B. The 
technical conference will be led by staff, and will be open for the 
public to attend. Attendees may register in advance at the following 
Web page: https://www.ferc.gov/whats-new/registration/midwest-independent-5-15-12-form.asp. Advance registration is not required, but 
is encouraged. Parties attending in person should still allow time to 
pass through building security procedures before the 9:00 a.m. start 
time of the conference.
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    \1\ Midwest Independent Transmission System Operator, Inc., 138 
FERC ] 61,235 (2012).
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    The conference will not be webcast, but will be accessible via 
telephone. Parties wishing to participate by phone should fill out the 
registration form and check the box indicating that they wish to 
participate by conference call, and do so no later than 5:00 p.m. 
(Eastern Time) on Wednesday, May 9. Parties selecting this option will 
receive a confirmation email containing a dial-in number and a password 
before the conference. To the extent possible, individuals calling from 
the same location share a single telephone line.
    FERC conferences are accessible under section 508 of the 
Rehabilitation Act of 1973. For accessibility accommodations please 
send an email to [email protected] or call toll free 866-208-3372 
(voice) or 202-208-1659 (TTY), or send a FAX to 202-208-2106 with the 
required accommodations.
    For further information regarding this conference, contact Stephen 
Pointer at [email protected] or 202-502-8761, Adam Pollock at 
[email protected] or 202-502-8458, or Katherine Waldbauer at 
[email protected] or 202-502-8232.
    I. Questions to be Addressed Prior to Technical Conference. The 
Midwest Independent Transmission System Operator, Inc. (MISO) and/or 
Potomac Economics, Inc., MISO's Independent Market Monitor (IMM), are 
requested to file written responses to each of the questions below by 
Thursday, May 10, 2012, so that the responses may be discussed at the 
technical conferences.
    1. Provide monthly information (from 2009 forward) on how many 
units were committed for VLR and the percentage of those units that 
were committed on transmission lines of less than 100 kV. Provide 
information on where in the MISO region these VLR units were committed. 
Does MISO expect VLR commitments in the future, and if so, where? 
Please explain.
    2. How many VLR units (from 2009 forward) were economically 
dispatched?
    3. With regard to the IMM's testimony in Docket No. ER12-678 at ] 
15-22,\2\ for the period from January 2010 to September 2011:
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    \2\ Docket No. ER12-678-000 Filing, Tab E, Affidavit of David B. 
Patton.
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    a. Were VLR units economically dispatched during any of these 
hours? Provide data on the number of hours VLR units were economically 
dispatched.
    b. Did these units have headroom? If so, how many MWs?
    4. MISO states that ``[i]n principle, voltage issues would be 
modeled using thermal constraints as a proxy in the commitment and 
dispatch'' \3\ and ``[i]n fact, these commitments are made per 
operating procedures and guidelines regardless of expected or actual 
deviation volumes.'' \4\
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    \3\ Analysis of Market Results at 1.
    \4\ Id. at 8.
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    a. Please provide the Operating Procedures and guidelines.

[[Page 24951]]

    b. Please identify all Business Practice Manuals that are relevant 
to Voltage and Local Reliability commitments.
    5. The IMM explains that the proposed mitigation thresholds in 
section 64.1.3 are intended to address inflexible physical parameters 
for VLR units that can increase Revenue Sufficiency Guarantee 
payments.\5\
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    \5\ Docket No. ER12-679-000 Filing, Tab D, Affidavit of David B. 
Patton at ]] 22-25.
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    a. The proposed mitigation thresholds for identifying uneconomic 
production in sections 64.1.3.a.i(a), (b) and (c) apply to all 
resources, not only to VLRs. Explain in detail why each threshold is 
appropriate for all resources, including VLRs.
    b. Neither the MISO submittal nor the IMM's testimony addresses the 
proposed threshold in section 64.1.3.a.i(a) of an incremental energy 
offer price for a resource that is less than 50 percent of the 
applicable Reference Level. Provide a justification for this threshold.
    c. With regard to proposed section 64.1.3.a.i(c), please explain 
why the existing thresholds for identifying economic withholding in 
sections 64.1.2.a.v and 64.1.2.a.vi should also be used to identify 
uneconomic production.
    6. Table 1 of the Analysis of Market Results \6\ indicates that it 
represents real-time Revenue Sufficiency Guarantee costs.
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    \6\ Analysis of Market Results.
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    a. Were all costs incurred in real time?
    b. If not, what costs were incurred in the day-ahead markets?
    7. Referencing the IMM's testimony in Docket No. ER12-678-000 at ] 
17-19,\7\ please explain the following.
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    \7\ Id.
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    a. How does the IMM determine the ``* * * available offline 
resources that MISO could have committed to replace the capacity 
provided by the local commitments and identified the least-cost 
resource that MISO would likely have committed.''
    b. Please describe all elements of the calculation of the avoided 
Day-Ahead and Real-Time Revenue Sufficiency Guarantee Credits that 
would have been paid to Resources that may have been committed to meet 
the Capacity needs in the absence of the Voltage and Local Reliability 
Commitments, as specified in proposed section 40.3.3.xviii(3).
    c. Why did the IMM base market-wide share on avoided Revenue 
Sufficiency Guarantee costs, rather than avoided MW?
* * * * *
    II. Questions to Be Discussed at the Conference. The conference 
will consist of three sessions, as detailed below. For each session, a 
representative of MISO and a representative of the IMM should be 
prepared to make opening statements that address the questions below. 
After statements by the MISO and IMM representatives, Commission staff 
will ask questions; as time permits, other attendees (including 
telephone participants) may also ask questions.

Session 1: Voltage and Local Reliability (VLR) Commitments (Docket Nos. 
ER12-678-000 and ER12-679-000) (9 a.m.-11 a.m.)

    8. MISO concludes that ``[a] significant increase in the Real-Time 
[Revenue Sufficiency Guarantee] Make Whole Payments associated with 
Voltage and Local Reliability Commitments has occurred, starting in 
early 2010. The increase has been evident and sustained through 
November 2011 based on recurring transmission issues at specific 
locations in the MISO footprint.'' \8\ Discuss the transmission 
reliability issues that have been occurring and what changed in 2010 
such that VLR commitments were not needed in 2009 but were required in 
2010. In the discussion, please indicate the extent to which the 
increase in Revenue Sufficiency Guarantee costs can be attributed to 
increased frequency of VLR commitments for specific units or to an 
increased number of different units committed for VLR.
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    \8\ Analysis of Market Results--Constraint Management 
Commitments, attached to both the Docket No. ER12-678-000 filing and 
the Docket No. ER12-679-000 filing as Tab C (Analysis of Market 
Results) at 7-8.
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    9. How are voltage constraints modeled in the Security Constrained 
Unit Commitment (SCUC) and Security Constrained Economic Dispatch 
(SCED)? For voltage constraints that are not modeled in the SCUC and 
SCED, why aren't they included? What models or other tools aside from 
the SCUC and SCED does MISO use to make VLR commitments?
    10. Explain how VLR units are committed and when they are committed 
in the operating and planning cycle. For all responses, provide 
objective criteria to the extent possible.
    a. Please explain when and how VLR requirements are determined.
    b. Are VLR commitments made for a specific MW amount, the total 
capacity of the generation unit, or on another basis? Please explain.
    c. Do MISO and the IMM coordinate their VLR determinations, or do 
they make those determinations separately?
    11. MISO states that ``VLR Commitments may be issued at various 
points in the sequence of administering the [Reliability Assessment 
Commitment (RAC)] process, depending on when the needed requirements 
are known.'' \9\ Explain this statement, and describe what information 
MISO is relying on to indicate that VLRs are required.
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    \9\ MISO Answer, Docket No. ER12-678-000, at 7.
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    a. As part of the RAC process, explain each of the roles for the 
following tools in determining the needs for resources committed for 
VLR: Forward Reliability Assessment Commitment, Intra-day Reliability 
Assessment Commitment, and Look Ahead Commitment.
    b. Does MISO consider a VLR commitment several days before the 
operating day to be part of a RAC process? Please explain.
    12. Are market participants informed that their units are VLR 
commitments when committed? If not, when are they informed? Are VLR 
units designated as such prior to when their offers are submitted? 
Describe the VLR designation process. Does MISO change a unit's VLR 
designation after the commitment is made? Is there a ``final'' 
designation after the fact (during the settlement accounting process)?
    13. Wisconsin Electric Power Company (WEPCO) argues that certain 
resource commitments should be exempt from the definition of VLR 
commitments, as follows: ``Resource commitments that, absent an 
Operating Guide to address [VLR] requirements, would have resulted from 
a [SCUC] in the Day-Ahead Energy and Operating Reserve Market or any 
[RAC], shall not be designated in this category.'' \10\
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    \10\ WEPCO Protest, Docket No. ER12-678-000, at 4-5.
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    a. Does WEPCO's proposed exclusion of SCUC commitments accurately 
depict how VLRs are committed? Please explain.
    b. Can units committed based on economics in the SCUC and SCED 
processes be classified as VLR commitments? If yes, provide examples.
    c. Can VLR units be declassified and become economic-only units? 
Please explain response.
    d. Is it possible for MISO to incorporate local reliability issues 
in the SCUC or SCED processes? Please explain.

Session 2: Cost Allocation (Docket No. ER12-678-000) (11:30 a.m.-1:30 
p.m.)

    14. MISO states that ``it does not anticipate any significant 
instances of pseudo-tied load modeling throughout the footprint that 
would exacerbate or

[[Page 24952]]

result in cost shifts.'' \11\ On what basis does MISO make that claim? 
Has MISO performed any studies to draw that conclusion? If so, please 
explain the results of the study.
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    \11\ MISO Answer in Docket No. ER12-678-000 at 9.
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    15. Could MISO include voltage management as a constraint in an 
SCED/SCUC model that would allow for cost allocation in the same way 
that the constraint management charge is derived?
    16. Please explain any objections MISO may have with regard to 
allowing Local Balancing Authority (LBA) Area participation in studies 
that result in costs being allocated to those LBAs.
    17. Referencing the transmittal letter in Docket No. ER12-678-000 
at 11, indicate objective criteria MISO would use that would form the 
basis for a broader allocation beyond the LBA Area.
    18. Referencing the discussion in the transmittal letter in Docket 
No. ER12-678-000 at 15 of ``Commercially Significant'' voltage and 
local reliability issues, explain all the criteria that MISO will use 
to determine if a VLR is commercially significant.

Session 3: Mitigation (Docket No. ER12-679-000) (2 p.m.-4 p.m.)

    19. The IMM's testimony describes voltage support commitments and 
reasons for those commitments, stating that ``local reliability and 
voltage support needs generally pertain to a very limited geographic 
area where the resources available to satisfy the reliability needs are 
owned by a very small number of suppliers, often only a single 
supplier.'' \12\ How will the IMM determine which units are VLR 
commitments? How will the IMM monitor for units committed for VLR and 
for economics (and which mitigation thresholds will apply)?
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    \12\ Docket No. ER12-679-000 Filing, Tab D, Affidavit of David 
B. Patton at ] 10.
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    20. To what extent do MISO and/or the IMM expect VLR mitigation to 
stem increasing Revenue Sufficiency Guarantee costs?
    21. Explain the interplay between VLR mitigation and existing 
mitigation measures within Broad Constrained Areas (BCAs) and Narrow 
Constrained Areas (NCAs). Could a resource be mitigated under both sets 
of mitigation thresholds? If so, under what circumstances?
    22. Please describe how MISO will determine reference levels for 
units committed for VLR. Given the specific market power concerns 
associated with VLRs, is it appropriate to use historical offer 
information to determine their initial reference levels?

Conference Conclusion: Next Steps (4 p.m.-4:30 p.m.)

    Staff will conclude the conference and outline next steps.

    Dated: April 20, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-10064 Filed 4-25-12; 8:45 am]
BILLING CODE 6717-01-P