Filing to Enhance LMR Participation in MISO Markets Docket No. ER

Transcription

1 Jacob T. Krouse Managing Sr. Corporate Counsel Direct Dial: -- December, 0 VIA ELECTRONIC FILING The Honorable Kimberly D. Bose Secretary Federal Energy Regulatory Commission First Street, NE Washington, DC 0 Re: Midcontinent Independent System Operator, Inc. Filing to Enhance LMR Participation in MISO Markets Docket No. ER Dear Secretary Bose: The Midcontinent Independent System Operator, Inc. ( MISO ), through this filing, proposes to revise certain resource availability requirement provisions related to Load Modifying Resources ( LMRs ) in its Open Access Transmission, Energy, and Operating Reserve Markets Tariff ( Tariff ). The proposal will provide MISO quicker access to, and will help ensure the improved seasonal availability of, the existing capabilities of LMRs. This proposal incorporates important feedback from stakeholders and is one of the first steps in a more extensive plan to implement improvements identified to support resilience and reliability through MISO s Resource Availability and Need ( RAN ) program. This filing is submitted concomitantly with one other filing that will address Demand Resource ( DR ) testing. An additional RAN-related filing, which will focus on improving generator outage scheduling, is currently planned for January 0. The instant filing will allow MISO to more effectively access the capabilities of LMRs that MISO operators are depending upon to maintain the resilience and reliability of the grid. While each of these filings are important to MISO s RAN program, they each include Tariff revisions that can be implemented independent of the others without diminishing the expected benefits of each individual proposal. MISO makes this filing pursuant to Section 0 of the Federal Power Act ( FPA ), U.S.C. d, and Part of the regulations of the Federal Energy Regulatory Commission ( FERC or Commission ), C.F.R.., et seq. All capitalized terms in this filing that are not otherwise defined have the same meaning as they have under the current MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff. While MISO originally planned to file the outage proposal in conjunction with the instant concomitant LMR filings, stakeholders raised concerns about the impact of the proposal on necessary near-term planned outages. MISO is delaying the outage proposal to better understand and address, if possible, stakeholder concerns. Midcontinent Independent System Operator, Inc City Center Drive Carmel, IN 0 Ames Crossing Road Eagan, MN 0 N. Causeway Blvd., Two Lakeway, Suite Metairie, LA Centerview Drive Little Rock, AR

2 The Honorable Kimberly D. Bose December, 0 Page of 0 Further, this filing represents one part of a small number of short term fixes intended to moderate current operational concerns while continuing to work with stakeholders in parallel towards a more holistic set of longer term solutions in the months and years to come. MISO requests an effective date for this filing of February 0, 0, and also is requesting waiver of certain registration and processing deadlines to allow for the inclusion of these provisions in the 0/00 Planning Year. However, in recognition of the upcoming holiday season, MISO requests the Commission provide an extended comment period ending on January, 0 to facilitate stakeholders review and comment on this proposal. I. BACKGROUND The MISO Region is transitioning from a generation portfolio dominated by coal and nuclear generation resources to a portfolio that relies on an increasing quantity of intermittent and emergency only resources even to meet MISO s planning reserve requirements. Base load generation retirements have increased the pace of this transition and have caused MISO to operate with actual capacity margins that have consistently been decreasing towards minimum resource requirements. As a result, MISO has experienced a decrease in operational flexibility as capacity margins continue to diminish. Operating at or near minimum reserve margin requirements exposes the MISO Region to greater impacts from correlated risks (e.g., extreme weather events and natural gas availability). These risks are exacerbated by ongoing trends, which have caused more non-summer resource risk and increased the value of resources that may be dispatched quickly, and with shorter notification times, throughout the operating day. An increased reliance on intermittent and variable resources creates the need for intra-day flexibility, placing a premium on resources that can rapidly respond to MISO s dispatch. Moreover, increasing forced outage rates for generation in the MISO Region together with a significant correlation in the timing of generation planned outages and de-rates, have caused resource risk outside of the traditional summer peak times. Specifically, the growth of emergency-only resources has resulted in additional operational stress during these non-summer emergencies, and for emergencies due to exigent conditions (e.g., a large unexpected forced generation outage), because these resources are only obligated to respond during summer peak emergencies and may have up to hour response times. While MISO and its stakeholders have been able to successfully serve firm load through the utilization of capacity cleared through MISO s resource adequacy processes, there has been a significant increase in the number of Maximum Generation Emergencies (e.g., alerts, warnings, and events), especially those occurring outside of the traditional summer peak. As discussed in the testimony of MISO s Executive Director of Market Development, Mr. Jeff Bladen, these changes have prompted MISO to evaluate the alignment of resource availability and need to determine how today s processes can be improved to ensure the reliable and efficient conversion of procured capacity to energy throughout the year. Bladen Testimony at -, -, -.

3 The Honorable Kimberly D. Bose December, 0 Page of 0 Although MISO s RAN evaluation is ongoing, MISO has identified four initial goals to address both immediate needs and bolster the eroding available reserve margin. These goals include:. Improving of planned generation outage scheduling and coordination;. Linking Resource accreditation and requirements with an initial focus on Load Modifying Resources (LMRs);. Aligning Planning Resource Auction ( PRA ) commitments with energy needs all year; and,. Ensuring flexible resource availability to address changing fleet character. The LMR proposal submitted in this filing is a component of the second goal of linking resource accreditation and requirements with an initial focus on LMRs. This proposal, along with the concomitant LMR testing filing, is expected to provide MISO s operators with greater access to the existing capabilities of LMRs. The proposed new LMR requirements are consistent with the existing treatment and expectations placed on generation resources to perform based on their physical capability. Specifically, the LMR proposal submitted with this filing will provide quicker access to, and improved seasonal availability of, LMRs through requiring such units to operate to their existing capability. As noted above, this improved performance is of increasing importance given MISO s increased dependence on LMRs as a planning reserve product. Additionally, enhancements to MISO s processes to schedule LMRs in anticipation of emergency conditions will increase system efficiency by removing barriers that have historically inhibited the use of longer-lead (e.g., - hour) LMRs to balance load with supply at the start, and through the duration, of emergencies. II. OVERVIEW OF MISO S LMR AVAILABILITY PROPOSAL Module E- of the Tariff allows a variety of resource types to clear in the PRA as capacity. LMRs may clear the PRA but are only required to be available to respond during Summer Season Maximum Generation Emergency Events that reach Step b under MISO s posted emergency operating procedures. As discussed in the testimony of Timothy Aliff, MISO s Director of System Operations, these emergencies have typically occurred with relatively short notice, often due to multiple forced outages occurring simultaneously with periods of higher than normal load. Recently, with the increased dependence on LMRs and reduced excess reserve margins, these conditions have frequently been occurring outside the summer season, as generator forced outages and high load conditions converge with high levels of planned generator outages typically scheduled in Spring and Fall. The capacity scarcity that manifests in these conditions does not align well with the requirements of LMRs that currently have no non-summer obligation to serve MISO load. Additionally, under MISO s Tariff, LMRs are obligated to deploy only in response Id. at -. Id. at -. Aliff Testimony at -. See also Bladen Testimony at. Bladen Testimony at.

4 The Honorable Kimberly D. Bose December, 0 Page of 0 to emergency events and with up to twelve hours of notice, further limiting their requirement to respond to short notice emergency needs. While the capability of individual LMRs may exceed these minimum requirements, non-summer and/or quicker response times are dependent on the voluntary action of individual Market Participants, not based on any consistent Tariff-based standard. MISO s proposal seeks to align the requirements of LMRs with their capabilities through Tariff revisions that:. Require LMRs to offer based on their actual availability in all seasons;. Require LMRs to deploy based on the shortest notification requirements that they can consistently meet; and,. Allow MISO to notify LMRs of a planned deployment prior to anticipated emergency conditions to position resources to serve emergency needs while allowing for their required notice. A. LMR Capability and Availability As discussed in Mr. Aliff s testimony, requiring an LMR to provide its year-round availability and shortest notice time, based on their physical capability as well as applicable regulatory and contractual limitations, will provide MISO with improved transparency and access to existing LMR capabilities during Emergency conditions and help align obligations of LMR resources with those placed on generation resources. As indicated in the proposed Tariff revisions, MISO s LMR provisions would take into account limitations on access to the operational characteristics of LMRs arising from retail tariffs. 0 Further, MISO would provide relevant contractual obligations that existed as of //0 with a two Planning Year transition period. This transition period will allow LMRs with relevant contractual limitations to revise their contractual obligations in order to be able to offer the non-summer availability, and shortest notification time that their resources are capable of delivering. Under the proposal, LMRs will indicate their non-summer availability and shortest notification requirement data through changes to the annual Capacity Resource registration process. During this process LMRs would be asked to explain and document their notice requirement and seasonal availability as described in the Business Practices Manual for Resource Adequacy.. Seasonal Availability Aliff Testimony at -. Id. at See proposed Sections A.. and A.. of the Tariff. Aliff Testimony at -,. Id. at -.

5 The Honorable Kimberly D. Bose December, 0 Page of 0 MISO is proposing to require LMRs to offer based on their availability throughout the Planning Year, including maintaining current requirements that necessitate that LMRs be available the entire Summer Season. MISO proposes to revise Tariff Sections A.. and A.. to state that DR and BTMG resources must register based on their physical availability with limitations for applicable regulatory and contractual restrictions: Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the [Demand Resource or BTMG] will supersede the physical availability of the [Demand Resource or BTMG]; however, in no event shall the [Demand Resource or BTMG] s maximum notice requirement be greater than hours. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the [Demand Resource or BTMG] in place as of December, 0 will supersede the physical availability of the [Demand Resource or BTMG] for the 0/00 and 00/0 Planning Years; however, in no event shall the [Demand Resource or BTMG] s maximum notice requirement be greater than hours. While certain stakeholders have argued that MISO s proposal imposes new or unforeseen obligations on their LMRs, as discussed in Mr. Aliff s testimony, this process improvement merely recognizes existing resource capability, and it ensures that MISO is aware of and can access the existing capability of LMRs. This proposed obligation on LMRs is consistent with the existing obligations imposed for generation resources to offer their physical capability to MISO operations. Further, we are requesting that the requirement to offer their available capability throughout the year and their shortest notification time takes effect for the start of the upcoming 0/00 Planning Year (unless eligible for the previously discussed transition) so that resources can update their resource offers appropriately prior to the upcoming PRA. Finally, the total obligations of LMRs will be maintained; they will continue to be obligated to no more than five () deployments or interruptions of four () hours each during a particular Planning Year. As explained by Mr. Aliff, this process improvement will provide better transparency into the actual operating characteristics of all units, allowing MISO to better utilize existing capabilities to meet resource needs for each season.. Notice Time MISO is proposing to require LMRs to provide their shortest notice time throughout the Planning Year, while maintaining that LMRs must be available in less than hours. MISO Id. at -. See Section V, infra. Aliff Testimony at,. Id. at, 0. Id. at -.

6 The Honorable Kimberly D. Bose December, 0 Page of 0 proposes to revise Sections A.. and A.. to state that DR and BTMG resources must register based on their physical availability with limitations for applicable regulatory and contractual restrictions, however: This availability must include at least the entire Summer Season. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the [Demand Resource or BTMG] will supersede the physical availability of the [Demand Resource or BTMG]; however, the [Demand Resource or BTMG] s availability must include the entire Summer Season. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the [Demand Resource or BTMG] in place as of December, 0 will supersede the physical availability of the [Demand Resource or BTMG] for the 0/00 and 00/0 Planning Years; however, the [Demand Resource or BTMG] s availability must include the entire Summer Season. B. LMRs called upon in advance of Emergency conditions In addition to increased availability, MISO has modified its emergency operating procedures and Section A... of the Tariff to allow for LMRs to be issued Scheduling Instructions in anticipation of needed deployments to meet expected emergency conditions. As discussed in Mr. Aliff s testimony, the ability to call on LMRs in anticipation of an actual emergency condition should mitigate the risk that LMRs with longer notification times cannot be deployed when needed. This modification also aligns with the concerns raised by MISO s Independent Market Monitor recommendation, which states that, under current processes, LMRs and other emergency resources with long notification times would provide little value in most emergencies. To effectuate this change, MISO proposes to add the following to Module E-: The Transmission Provider or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR when necessary to notify such LMR of a planned deployment through the issuance of Scheduling Instructions. LMRs may be issued Scheduling Instructions during a declared Emergency or in anticipation of an Emergency at the discretion of Transmission Provider. LMRs shall acknowledge Scheduling Instructions issued in accordance with BPM for Resource Adequacy. In the event of an anticipated Emergency where the Transmission Provider does not declare the actual Emergency at least two hours prior to the start of Id. at. 0 State of the Market Report for the MISO Electricity Markets, June 0, available at: at.

7 The Honorable Kimberly D. Bose December, 0 Page of 0 the Scheduling Instructions, LMRs are not obligated to meet the Scheduling Instructions issued in anticipation of such Emergency and will not be penalized for non-performance. This does not apply to Scheduling Instructions issued after the declaration of an Emergency. An LMR that acknowledges Scheduling Instructions as required by the BPM for Resource Adequacy will receive credit for one () of the five () deployments or interruptions required for the LMR whether or not an Emergency is declared. However, an LMR that fails to acknowledge the Scheduling Instructions as required by the BPM for Resource Adequacy will not receive credit for such deployment or interruption. An LMR that is also registered as an EDR resource that responds to Transmission Provider s notification will be eligible to receive compensation for costs incurred, subject to Transmission Provider and IMM review. However, an LMR that does not perform consistent with its Scheduling Instructions in the event of an Emergency is subject to the penalty provisions of Section A.. and will not receive credit as one () of the five () deployments or interruptions required for such resource. III. STAKEHOLDER PROCESS MISO worked with stakeholders to create a balanced proposal with multiple viewpoints represented. This work began in 0, when a Market Roadmap item was created to track issues associated with the seasonal procurement of capacity. The topic was discussed in the Resource Adequacy Subcommittee ( RASC ), and the subject matter was expanded to capture the range of concerns surrounding the availability of resources throughout the year and discussed at the Steering Committee for subsequent assignment. Throughout 0, MISO led stakeholders through discussions on the overall problem to be addressed by Resource Availability and Need in the Reliability Subcommittee ( RSC ), as well as through the Advisory Committee and with the MISO Board of Directors through two Hot Topics discussions. These discussions ultimately resulted in a phased filing approach, with MISO pursuing near term filings to moderate current operational concerns while continuing to work with stakeholders in parallel towards a more holistic set of solutions. This filing represents a portion of the near term improvements suggested. LMRs have grown the last two years as a percentage of the resources cleared in MISO s Planning Resource Auction to serve firm load. MISO s LMR availability proposal was modified in collaboration with stakeholders to include the preclusions for applicable regulatory restrictions and a transition for contractual preclusions. These preclusions are reasonable to allow resources to meet the requirements of MISO s Tariff as well as those of regulators and LMR contract counterparties while still providing enhanced certainty and incentives regarding the capability of LMRs offering into the PRA. Additionally and per stakeholder requests, MISO ensured that the proposed improvements conform to the current obligation on number or duration of calls for LMRs, allowing a proposal which more accurately utilizes the full capability of LMRs without imposing a higher magnitude of potential calls.

8 The Honorable Kimberly D. Bose December, 0 Page of 0 IV. DOCUMENTS SUBMITTED WITH THIS FILING In addition to this Transmittal Letter, this submission includes: 0 Tab A Clean Tariff Sheets effective /0/0 Tab B Redline Tariff Sheets effective /0/0 Tab C Testimony of Jeff Bladen Tab D Testimony of Timothy Aliff V. PROPOSED EFFECTIVE Date AND REQUEST FOR WAIVER MISO requests an effective date for this filing of February 0, 0 for this filing, which is not less than sixty (0) days but not more than one hundred twenty (0) days after the filing date. This date will allow MISO to implement the changes in the instant filing for the 0/00 Planning Resource Auction. However, given the timing of this filing and the upcoming 0/00 Planning Resource Auction, MISO requests a waiver of the registration deadline for Load Modifying Resources in Sections A.., A.., A.., and to the extent necessary, MISO s Business Practices Manual for Resource Adequacy. Additionally, MISO requests waiver of the timing requirements provided in Section A. regarding Fixed Resource Adequacy Plans ( FRAPs ). In granting tariff waivers, the Commission generally focuses on the following four criteria: () the entity seeking the waiver acted in good faith; () the waiver is of a limited scope; () a concrete problem needs to be remedied; and () the waiver will not have undesirable consequences, such as harming third parties. MISO submits that the waiver requested in this filing meets all four of these criteria. Given the pressing issues facing the MISO Region as described in this filing, MISO believes it is acting in good faith in asking for additional information outlined in this filing to ensure MISO can efficiently use all resources that clear the Planning Resource Auction to address Emergency conditions. This waiver request is targeted to those obligations of Market Participants and MISO with respect to FRAPs and LMRs between February, 0 and March, 0. MISO proposes the following timeline for FRAP and LMR registration for the 0/00 PRA. MISO is asking that Market Participants who would otherwise have until February to register exiting Load Modifying Resources have until March to register their LMRs in accordance with the instant proposal. Market Participants will notify MISO when registering their LMRs whether or not they will be used in a FRAP. If so notified that an LMR will be used for a FRAP, MISO will review and notify Market Participants of the outcome by March, 0. MISO will allow Market Participants to submit FRAPs by March, 0. MISO will notify any 0 C.F.R..(b)() (0). ISO New England, Inc., FERC, at P (00), citing Wisvest-Connecticut, 0 FERC, at, (00); Great Lakes Gas Transmission Limited Partnership, 0 FERC, (00); TransColorado Gas Transmission Co., 0 FERC,0 (00); Northern Border Pipeline Co., FERC, (); Midcontinent Indep. Sys. Operator, Inc., FERC, at P 0 (0).

9 The Honorable Kimberly D. Bose December, 0 Page of 0 LSE electing to opt-out of the PRA via a FRAP by March 0, 0 of the extent that an LSE s Planning Reserve Margin Requirement or share of Local Clearing Requirement for each Local Resource Zone is not covered by a submitted FRAP. MISO will review and notify Market Participants of the outcome of LMR registrations not used in a FRAP by March, 0. MISO proposes to waive these obligations by one month or less to give Market Participants additional time to register and MISO sufficient time to review and notify Market Participants of the outcome of such registrations. A concrete problem will need to be remedied as some, but not all, Market Participant registrations will be due before the effective date of this filing and MISO could not have sufficient time to properly run pre-auction processes. Should the Commission accept this filing, MISO believes it is appropriate to give Market Participants time to submit registration materials for Load Modifying Resources. Finally, the waiver will not have undesirable circumstances, but will in fact ensure that MISO can provide stakeholders with the necessary information and allow Market Participants with sufficient time to register in accordance with the proposed processes and requirements. MISO s proposed timeline is summarized in the following table: Activity Current deadline Deadline if waiver approved Register existing LMRs / / Register new LMRs to be / / used in a FRAP Register new LMRs not used / / in a FRAP MISO review of LMRs th business day / included in a FRAP of March FRAP submission deadline th business day / of March Notification of insufficient / /0 ZRCs if opting out of PRA via submission of a FRAP Notify LMRs of registration outcomes not used in a FRAP Good faith effort by th business day of March / VI. COMMUNICATIONS MISO respectfully requests waiver of Rule 0(b)() of the Commission s Rules of Practice and Procedure, C.F.R..0(b)() (0), to the extent necessary to permit the designation of more than two persons for service on behalf of MISO in this proceeding and requests all communications related to this filing be directed to:

10 The Honorable Kimberly D. Bose December, 0 Page 0 of 0 Jacob Krouse Managing Senior Corporate Counsel Midcontinent Independent System Operator, Inc. 0 City Center Drive Carmel, Indiana 0 Telephone: ()-00 jkrouse@misoenergy.org James C. Holsclaw Kyle Swick The Holsclaw Group, LLC 0 E. Main St. Plainfield, IN Telephone:..0 jim@thglaw.com kswick@thglaw.com VII. NOTICE AND SERVICE MISO has served a copy of this filing electronically, including attachments, upon all Tariff Customers, MISO Members, Member representatives of Transmission Owners and Non- Transmission Owners, as well as all state commissions within the region. The filing has been posted electronically on MISO s website currently at for other parties interested in this matter. VIII. CONCLUSION For all of the foregoing reasons, MISO respectfully requests that the Commission accept this locational filing, effective February 0, 0, and grant waiver of any Commission regulations not addressed herein that the Commission may deem applicable to this filing. Attachments Respectfully submitted, /s/ Jacob T. Krouse Jacob T. Krouse Midcontinent Independent System Operator, Inc. Attorney for the Midcontinent Independent System Operator, Inc.

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12 MISO A... FERC Electric Tariff Deployment Procedures for LMR MODULES.0.0 Deployment Procedures for LMR Procedures for deployment of LMR are found in the BPM for Resource Adequacy and emergency operating procedures. Such procedures shall be consistent with the information provided by the Market Participant regarding availability and notice time. At a minimum the Market Participant will provide the deployment parameters of the LMR (as described in Sections A.. and A..), during declared Emergencies prior to the use of Operating Reserves to achieve energy balance. The Market Participant shall notify the Transmission Provider or Local Balancing Authority when the status or availability of an LMR changes, except for de minimis changes that do not need to be reported, according to procedures specified in the BPM for Resource Adequacy and emergency operating procedures. The Transmission Provider or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR when necessary to deploy or notify such LMR of a planned deployment. The Transmission Provider or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR when necessary to notify such LMR of a planned deployment through the issuance of Scheduling Instructions. LMRs may be issued Scheduling Instructions during a declared Emergency or in anticipation of an Emergency at the discretion of Transmission Provider. LMRs shall acknowledge Scheduling Instructions issued in accordance with BPM for Resource Adequacy. In the event of an anticipated Emergency where the Transmission Provider does not declare the actual Emergency at least two hours prior to the start of the Scheduling Instructions, LMRs are not obligated to meet the Scheduling Instructions issued in anticipation of such Emergency and will not be penalized for non-performance. This does not apply to Scheduling Instructions issued after the declaration of an Emergency. Effective On: February 0, 0

13 MISO A... FERC Electric Tariff Deployment Procedures for LMR MODULES.0.0 An LMR that acknowledges Scheduling Instructions as required by the BPM for Resource Adequacy will receive credit for one () of the five () deployments or interruptions required for the LMR whether or not an Emergency is declared. However, an LMR that fails to acknowledge the Scheduling Instructions as required by the BPM for Resource Adequacy will not receive credit for such deployment or interruption. An LMR that is also registered as an EDR resource that responds to Transmission Provider s notification will be eligible to receive compensation for costs incurred, subject to Transmission Provider and IMM review. However, an LMR that does not perform consistent with its Scheduling Instructions in the event of an Emergency is subject to the penalty provisions of Section A.. and will not receive credit as one () of the five () deployments or interruptions required for such resource. Effective On: February 0, 0

14 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0 Demand Resource Eligibility A Market Participant that possesses ownership or equivalent contractual rights in a Demand Resource can request accreditation for a Demand Resource as an LMR by registering such resource with the Transmission Provider as documented in the BPM for Resource Adequacy and by meeting the following requirements: a. The Demand Resource must be equal to or greater than 00 kw (a grouping of smaller resources aggregated together that can reduce an LSE s Coincident Peak Demand may qualify in meeting this standard). b. The Demand Resource must be available to be scheduled for a Demand reduction at the targeted Demand reduction amount or by moving to a specified firm service level with notice based on their physical availability but with no more than Hours advance notice required from the Transmission Provider. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the Demand Resource will supersede the physical availability of the Demand Resource; however, in no event shall the Demand Resource s maximum notice requirement be greater than hours. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the Demand Resource in place as of December, 0 will supersede the physical availability of the Demand Resource for the 0/00 and 00/0 Planning Years; however, in no event shall the Demand Resource s maximum notice requirement be greater than hours. Effective On: February 0, 0

15 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0 c. Once Scheduling Instructions are given by the Transmission Provider that require a Demand reduction, the Demand Resource must be capable of ramping down to meet the targeted Demand reduction amount or to achieve the firm service level by the Hour designated by the Transmission Provider s Scheduling Instructions. d. Once the targeted amount of Demand reduction or firm service level is achieved, the Demand Resource must be able to maintain the targeted amount of Demand reduction or firm service level for at least four () continuous Hours. e. The Demand Resource must be capable of being interrupted for at least the first five () times requested based on their physical availability (when called upon by the Transmission Provider for an Emergency) during any Planning Year for which the Demand Resource receives credit as a Planning Resource. This availability must include at least the entire Summer Season. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the Demand Resource will supersede the physical availability of the Demand Resource; however, the Demand Resource s availability must include the entire Summer Season. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the Demand Resource in place as of December, 0 will supersede the physical availability of the Demand Resource for the 0/00 and 00/0 Planning Years; however, the Demand Resource s availability must include the entire Summer Season. Effective On: February 0, 0

16 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0 f. Unless the Demand Resource is unavailable as a result of maintenance requirements or for reasons of Force Majeure, when a Demand reduction is requested by the Transmission Provider for an Emergency, the resultant reduction must be a reduction that would not have otherwise occurred within the next twenty four () hour period. There shall be no penalties assessed to a Market Participant representing the entity that has offered ZRCs from the LMR if the Demand Resource is unavailable for interruption as a result of maintenance requirements in accordance with Good Utility Practice, or for reasons of Force Majeure, or in the event that the specified Demand reduction had already been accomplished for other reasons (e.g., economic considerations, operating one s own Demand Resource at or above the credited level of Demand Resource, or local reliability concerns in accordance with instructions from the Local Balancing Authority). g. A Demand Resource for which curtailment is not an obligation during Emergency events declared by the Transmission Provider pursuant to the Transmission Provider emergency operating procedures, will not qualify as an LMR. h. A Market Participant shall be prohibited from registering a Demand Resource for which credit is already being taken by another entity. i. Demand Resources that are offered into the Day-Ahead and/or Real-Time Energy and Operating Reserve Markets as price sensitive Bids are obligated to be interrupted during an Emergency pursuant to the Transmission Provider Effective On: February 0, 0

17 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0 emergency operating procedures regardless of the projected or actual Real-Time Energy Market LMP. j. A Market Participant must demonstrate demand reduction capability for each Planning Year on an annual basis as established in the BPM for Resource Adequacy by conducting a real power test or providing operational data, or by developing an alternative mechanism, subject to the approval of the Transmission Provider, by which the demand reduction capability can be demonstrated without requiring an actual demand reduction to occur, and by submitting the mock test results to the Transmission Provider no later than October prior to such Planning Year for existing accredited DR. For new DR, a real power test or providing operational data for a demand reduction, or a mock test must be conducted and results submitted to the Transmission Provider prior to qualifying as an LMR, but no later than March prior to the PRA in accordance with the BPM for Resource Adequacy. k. Market Participants providing physical, regulatory, or contractual limitations of the notice times and availability of Demand Resources must provide appropriate documentation to the Transmission Provider in accordance with the BPM for Resource Adequacy. Effective On: February 0, 0

18 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0 Behind the Meter Generation Eligibility. In accordance with the BPM for Resource Adequacy, the Transmission Provider will qualify a BTMG for the upcoming Planning Year. A Market Participant that possesses ownership or equivalent contractual rights in a BTMG can request accreditation for such BTMG by meeting the following requirements: a. registering such resource(s) with the Transmission Provider as documented in the BPM for Resource Adequacy. b. demonstrating GVTC capability for each Planning Year on an annual basis as established in the BPM for Resource Adequacy, and by submitting the GVTC results to the Transmission Provider no later than October prior to such Planning Year for existing accredited BTMG. All new BTMGs or an existing accredited BTMG that has an increased installed capacity shall submit their GVTC to the Transmission Provider prior to qualification, but no later than March prior to the PRA as established in the BPM for Resource Adequacy. c. submitting generator availability data (including, but not limited to, NERC GADS information) into a database provided by the Transmission Provider and as established in the BPM for Resource Adequacy. A Market Participant is not required to report generator availability data based on GVTC for a BTMG less than 0 MW if the Market Participant has never provided such data for such BTMG. A Market Participant that begins reporting generator availability data based upon GVTC for a BTMG that is less than 0 MW must continue to report such data. Effective On: February 0, 0

19 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0 d. confirming such BTMG can be available to provide energy with notice based on their physical capability but with no more than Hours advance notice from the Transmission Provider. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the BTMG will supersede the physical availability of the BTMG; however, in no event shall the BTMG s maximum notice time requirement be greater than hours. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the BTMG in place as of December, 0 will supersede the physical availability of the BTMG for the 0/00 and 00/0 Planning Years; however, in no event will the maximum notice time requirement be greater than hours. e. demonstrating that the BTMG is able to sustain energy production at the accredited MW level for at least four () continuous Hours; and f. demonstrating that the BTMG is capable of being deployed at the accredited MW level at least the first five () times requested based on their physical capability (when called upon by the Transmission Provider during an Emergency) during any Planning Year for which the BTMG receives credit as a Planning Resource. This availability must include at least the entire Summer Season. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the BTMG will supersede the physical availability of the BTMG; however, the BTMG s availability must include the entire Summer Season. Further, limitations due to contractual obligations that are more restrictive than Effective On: February 0, 0

20 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0 the physical limitations of the BTMG in place as of December, 0 will supersede the physical availability of the BTMG for the 0/00 and 00/0 Planning Years; however, the BTMG s availability must include the entire Summer Season. g. There shall be no penalties assessed to a Market Participant representing the entity that has offered ZRCs from the LMR if the BTMG Resource is unavailable for interruption as a result of maintenance requirements in accordance with Good Utility Practice, or for reasons of Force Majeure, or in the event the specified BTMG reduction had already been accomplished for other reasons (e.g., economic considerations, operating the BTMG Resource at or above the credited level of BTMG Resource, or local reliability concerns in accordance with instructions from the Local Balancing Authority). h. A BTMG Resource for which operation is not an obligation during Emergency events declared by the Transmission Provider pursuant to the Transmission Provider emergency operating procedures, will not qualify as an LMR. i. A Market Participant shall be prohibited from registering a BTMG Resource for which credit is already being taken by another entity. j. Market Participants providing physical, regulatory, or contractual limitations of the notice time and availability of BTMG must provide appropriate documentation to the Transmission Provider in accordance with the BPM for Resource Adequacy.. Installed Capacity (ICAP) Deferral Effective On: February 0, 0

21 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0 If a Market Participant for a BTMG has not completed GVTC testing by the deadlines provided in A...b, is not expected to demonstrate deliverability, or is otherwise not expected to demonstrate commercial operation prior to March, ZRCs from such capacity may be used the PRA or in a FRAP (including through bilateral ZRC transactions), subject to the notification, credit, and non-compliance provisions of Section A... Effective On: February 0, 0

22 Tab B

23 MISO A... FERC Electric Tariff Deployment Procedures for LMR MODULES.0.0,.0.0 Deployment Procedures for LMR Procedures for deployment of LMR are found in the BPM for Resource Adequacy and emergency operating procedures. Such procedures shall be consistent with the information provided by the Market Participant regarding availability and notice time. and at At a minimum the Market Participant will provide for the deployment parameters of the LMR (as described in Sections A.. and A..), when available, during declared Emergencies prior to the use of Operating Reserves to achieve energy balance. The Market Participant shall notify the Transmission Provider or Local Balancing Authority when the status or availability of an LMR changes, except for de minimis changes that do not need to be reported, according to procedures specified in the BPM for Resource Adequacy and emergency operating procedures. The Transmission Provider or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR when necessary to deploy or notify such LMR of a planned deployment. The Transmission Provider or Local Balancing Authority shall coordinate with the Market Participant that owns or controls such LMR when necessary to notify such LMR of a planned deployment through the issuance of Scheduling Instructions. LMRs may be issued Scheduling Instructions during a declared Emergency or in anticipation of an Emergency at the discretion of Transmission Provider. LMRs shall acknowledge Scheduling Instructions issued in accordance with BPM for Resource Adequacy. In the event of an anticipated Emergency where the Transmission Provider does not declare the actual Emergency at least two hours prior to the start of the Scheduling Instructions, LMRs are not obligated to meet the Scheduling Instructions Effective On: February 0, 0

24 MISO A... FERC Electric Tariff Deployment Procedures for LMR MODULES.0.0,.0.0 issued in anticipation of such Emergency and will not be penalized for non-performance. This does not apply to Scheduling Instructions issued after the declaration of an Emergency. An LMR that acknowledges Scheduling Instructions as required by the BPM for Resource Adequacy will receive credit for one () of the five () deployments or interruptions required for the LMR whether or not an Emergency is declared. However, an LMR that fails to acknowledge the Scheduling Instructions as required by the BPM for Resource Adequacy will not receive credit for such deployment or interruption. An LMR that is also registered as an EDR resource that responds to Transmission Provider s notification will be eligible to receive compensation for costs incurred, subject to Transmission Provider and IMM review. However, an LMR that does not perform consistent with its Scheduling Instructions in the event of an Emergency is subject to the penalty provisions of Section A.. and will not receive credit as one () of the five () deployments or interruptions required for such resource. Effective On: February 0, 0

25 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0,.0.0 Demand Resource Eligibility A Market Participant that possesses ownership or equivalent contractual rights in a Demand Resource can request accreditation for a Demand Resource as an LMR by registering such resource with the Transmission Provider as documented in the BPM for Resource Adequacy and by meeting the following requirements: a. The Demand Resource must be equal to or greater than 00 kw (a grouping of smaller resources aggregated together that can reduce an LSE s Coincident Peak Demand may qualify in meeting this standard). b. The Demand Resource must be available to be scheduled for a Demand reduction at the targeted Demand reduction amount or by moving to a specified firm service level with notice based on their physical availability but with no more than Hours advance notice required from the Transmission Provider. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the Demand Resource will supersede the physical availability of the Demand Resource; however, in no event shall the Demand Resource s maximum notice requirement be greater than hours. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the Demand Resource in place as of December, 0 will supersede the physical availability of the Demand Resource for the 0/00 and 00/0 Planning Years; however, in no event shall the Demand Resource s maximum notice requirement be greater than hours. Effective On: February 0, 0

26 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0,.0.0 c. Once Scheduling Instructions are given by the Transmission Provider that require a Demand reduction, the Demand Resource must be capable of ramping down to meet the targeted Demand reduction amount or to achieve the firm service level by the Hour designated by the Transmission Provider s Scheduling Instructions. d. Once the targeted amount of Demand reduction or firm service level is achieved, the Demand Resource must be able to maintain the targeted amount of Demand reduction or firm service level for at least four () continuous Hours. e. The Demand Resource must be capable of being interrupted for at least the first five () times requested during the Summer Seasonbased on their physical availability (when called upon by the Transmission Provider for an Emergency) during any Planning Year for which the Demand Resource receives credit as a Planning Resource. This availability must include at least the entire Summer Season. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the Demand Resource will supersede the physical availability of the Demand Resource; however, the Demand Resource s availability must include the entire Summer Season. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the Demand Resource in place as of December, 0 will supersede the physical availability of the Demand Resource for the 0/00 and 00/0 Planning Years; however, the Demand Resource s availability must include the entire Summer Season. Effective On: February 0, 0

27 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0,.0.0 f. Unless the Demand Resource is unavailable as a result of maintenance requirements or for reasons of Force Majeure, when a Demand reduction is requested by the Transmission Provider for an Emergency, the resultant reduction must be a reduction that would not have otherwise occurred within the next twenty four () hour period. There shall be no penalties assessed to a Market Participant representing the entity that has offered ZRCs from the LMR if the Demand Resource is unavailable for interruption as a result of maintenance requirements in accordance with Good Utility Practice, or for reasons of Force Majeure, or in the event that the specified Demand reduction had already been accomplished for other reasons (e.g., economic considerations, operating one s own Demand Resource at or above the credited level of Demand Resource, or local reliability concerns in accordance with instructions from the Local Balancing Authority). g. A Demand Resource for which curtailment is not an obligation during Emergency events declared by the Transmission Provider pursuant to the Transmission Provider emergency operating procedures, will not qualify as an LMR. h. A Market Participant shall be prohibited from registering a Demand Resource for which credit is already being taken by another entity. i. Demand Resources that are offered into the Day-Ahead and/or Real-Time Energy and Operating Reserve Markets as price sensitive Bids are obligated to be interrupted during an Emergency pursuant to the Transmission Provider Effective On: February 0, 0

28 MISO A.. FERC Electric Tariff Demand Resources Eligibility MODULES.0.0,.0.0 emergency operating procedures regardless of the projected or actual Real-Time Energy Market LMP. j. A Market Participant must demonstrate demand reduction capability for each Planning Year on an annual basis as established in the BPM for Resource Adequacy by conducting a real power test or providing operational data, or by developing an alternative mechanism, subject to the approval of the Transmission Provider, by which the demand reduction capability can be demonstrated without requiring an actual demand reduction to occur, and by submitting the mock test results to the Transmission Provider no later than October prior to such Planning Year for existing accredited DR. For new DR, a real power test or providing operational data for a demand reduction, or a mock test must be conducted and results submitted to the Transmission Provider prior to qualifying as an LMR, but no later than March prior to the PRA in accordance with the BPM for Resource Adequacy. k. Market Participants providing physical, regulatory, or contractual limitations of the notice times and availability of Demand Resources must provide appropriate documentation to the Transmission Provider in accordance with the BPM for Resource Adequacy. Effective On: February 0, 0

29 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0,.0.0 Behind the Meter Generation Eligibility. In accordance with the BPM for Resource Adequacy, the Transmission Provider will qualify a BTMG for the upcoming Planning Year. A Market Participant that possesses ownership or equivalent contractual rights in a BTMG can request accreditation for such BTMG by meeting the following requirements: a. registering such resource(s) with the Transmission Provider as documented in the BPM for Resource Adequacy;. b. demonstrating GVTC capability for each Planning Year on an annual basis as established in the BPM for Resource Adequacy, and by submitting the GVTC results to the Transmission Provider no later than October prior to such Planning Year for existing accredited BTMG. All new BTMGs or an existing accredited BTMG that has an increased installed capacity shall submit their GVTC to the Transmission Provider prior to qualification, but no later than March prior to the PRA as established in the BPM for Resource Adequacy. c. submitting generator availability data (including, but not limited to, NERC GADS information) into a database provided by the Transmission Provider and as established in the BPM for Resource Adequacy. A Market Participant is not required to report generator availability data based on GVTC for a BTMG less than 0 MW if the Market Participant has never provided such data for such BTMG. A Market Participant that begins reporting generator availability data based upon GVTC for a BTMG that is less than 0 MW must continue to report such data.; Effective On: February 0, 0

30 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0,.0.0 d. confirming such BTMG can be available to provide energy with notice based on their physical capability but with no more than Hours advance notice from the Transmission Provider;. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the BTMG will supersede the physical availability of the BTMG; however, in no event shall the BTMG s maximum notice time requirement be greater than hours. Further, limitations due to contractual obligations that are more restrictive than the physical limitations of the BTMG in place as of December, 0 will supersede the physical availability of the BTMG for the 0/00 and 00/0 Planning Years; however, in no event will the maximum notice time requirement be greater than hours. e. demonstrating that the BTMG is able to sustain energy production at the accredited MW level for at least four () continuous Hours; and f. demonstrating that the BTMG is capable of being deployed at the accredited MW level at least the first five () times requested by the Transmission Provider during the Summer Seasonbased on their physical capability (when called upon by the Transmission Provider during an Emergency) during any Planning Year for which the BTMG receives credit as a Planning Resource. This availability must include at least the entire Summer Season. Limitations due to applicable regulatory restrictions that are more restrictive than the physical limitations of the BTMG will supersede the physical availability of the BTMG; however, the BTMG s availability must include the entire Summer Season. Further, limitations due to Effective On: February 0, 0

31 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0,.0.0 contractual obligations that are more restrictive than the physical limitations of the BTMG in place as of December, 0 will supersede the physical availability of the BTMG for the 0/00 and 00/0 Planning Years; however, the BTMG s availability must include the entire Summer Season. g. There shall be no penalties assessed to a Market Participant representing the entity that has offered ZRCs from the LMR if the BTMG Resource is unavailable for interruption as a result of maintenance requirements in accordance with Good Utility Practice, or for reasons of Force Majeure, or in the event the specified BTMG reduction had already been accomplished for other reasons (e.g., economic considerations, operating the BTMG Resource at or above the credited level of BTMG Resource, or local reliability concerns in accordance with instructions from the Local Balancing Authority). h. A BTMG Resource for which operation is not an obligation during Emergency events declared by the Transmission Provider pursuant to the Transmission Provider emergency operating procedures, will not qualify as an LMR. i. A Market Participant shall be prohibited from registering a BTMG Resource for which credit is already being taken by another entity. j. Market Participants providing physical, regulatory, or contractual limitations of the notice time and availability of BTMG must provide appropriate documentation to the Transmission Provider in accordance with the BPM for Resource Adequacy.. Installed Capacity (ICAP) Deferral Effective On: February 0, 0

32 MISO A.. FERC Electric Tariff Behind the Meter Generation Eligibility MODULES.0.0,.0.0 If a Market Participant for a BTMG has not completed GVTC testing by the deadlines provided in A...b, is not expected to demonstrate deliverability, or is otherwise not expected to demonstrate commercial operation prior to March, ZRCs from such capacity may be used the PRA or in a FRAP (including through bilateral ZRC transactions), subject to the notification, credit, and non-compliance provisions of Section A... Effective On: February 0, 0

33 Tab C

34 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION PREPARED DIRECT TESTIMONY OF JEFF BLADEN 0 I. PROFESSIONAL BACKGROUND AND QUALIFICATIONS Q. Please state your name, current position, and business address. A. My name is Jeff Bladen. I am the Executive Director of Market Development for the Midcontinent Independent System Operator, Inc. ( MISO ). My business address is 0 City Center Drive, Carmel, Indiana. Q. Please describe your educational background and professional experience. A. I have a Bachelor of Arts degree from the Maxwell School of Public Affairs at Syracuse University and a Masters of Business Administration from New York University. Prior to joining MISO, I served as the North American division head and leader of DNV GL Energy s (formerly KEMA) Markets, Policy & Strategy Development practice. Before joining DNV GL, I previously served as head of strategy for Gamesa North America s wind farm development business. In addition, I was the General Manager for market strategy at PJM Interconnection through 00. My work at PJM included a leading role in the reforms to its capacity market that became known as the Reliability Pricing Model. I began my career in the energy business as one of the original team members at New Energy Ventures; one of the first and among the most successful competitive retail energy firms in the world and which today is the competitive retail energy provider subsidiary of Exelon.

35 Q. Please describe your job responsibilities as they relate to this filing. A. As the Executive Director of Market Development, I am responsible for the overall planning for and execution of MISO s market design. Changes that affect key elements of energy price formation and the conversion of capacity to energy, including design principles discussed in the Resource Availability and Need ( RAN ) effort, are a core element of those responsibilities. II. PURPOSE OF TESTIMONY AND RAN PROGRAM OVERVIEW 0 0 Q. What is the purpose of your testimony? A. My testimony supports MISO s proposal in this docket and in a contemporaneously filed docket regarding the treatment of Load Modifying Resources ( LMRs ) primarily under Module E- of the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( Tariff ). I will also reference a subsequent filing scheduled for January 0 that will address the outage coordination provisions found in Module C of the Tariff. These proposals have been identified through MISO s RAN efforts as initial improvements to address imminent operational challenges MISO. These operational challenges are driven by several concurrent trends, including:. The evolution of the generation portfolio from a coal and nuclear dominant fleet to a mix of generation with a higher proportion of intermittent and emergency only resources, increasing the importance of transparency for such resources. All capitalized terms in my testimony not otherwise defined have the same meaning as they have under the current MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff.

36 0 0. An increase in generation retirements that have caused MISO to operate increasingly closer to minimum reserve margin requirements, diminishing the operational flexibility historically provided by excess capacity.. An increase in forced outage rates and a high correlation in the timing of planned outages and derates, creating resource risk outside of Summer peak time. If accepted by the Federal Energy Regulatory Commission ( FERC or Commission ), the RAN proposals will be a first step in addressing these operational challenges and will create an enhanced ability for MISO operators to be able to efficiently use the resources (specifically LMRs) available to them during emergency conditions. A subsequent RAN filing, planned for January 0, will add to these improvements through incentivizing generator owners to schedule their outages further in advance or in times that do not correspond with low margin in the MISO region. Q. Please describe MISO s RAN program and goals. A. MISO s RAN program is rooted in issues shared with stakeholders as early as 0 and has gained momentum in 0 and 0 through discussions in the MISO stakeholder process. As part of this process, MISO published three separate white-papers culminating in an evaluation whitepaper that presented a gamut of short and long term improvement options. My testimony today is in support of a small number of short term fixes that were discussed in the Resource Availability and Need, Evaluation Whitepaper, September 0, 0, available at: Whitepaper.pdf

37 0 0 stakeholder process in the last half of 0 along with being presented in the aforementioned issues summary. The RAN program initially identified four goals: ) Improve outage scheduling and expectations; ) Link resource accreditation and requirements with initial focus on LMRs; ) Align Planning Resource Auction ( PRA ) commitments with energy needs all year; and, ) Ensure flexible resource availability to address changing fleet characteristics. Each goal corresponds to a group of potential solutions discussed with stakeholders that address related gaps, such as a lack of transparency in outage scheduling or limited access to LMRs. For the purposes of today s contemporaneous filings, MISO is focused on the second goal with tangible, nearterm improvements that are urgently needed to address the operational challenges resulting from the current Resource Adequacy construct. Complementary, longer-term improvements will be designed to holistically address all the goals identified above, and will be submitted in subsequent filings. MISO has committed to stakeholders to work through these longer-term holistic improvements during the course of 0, but is filing these near term improvements to ensure reliability in the interim.

38 0 0 Q. Please describe MISO s second goal: Link Resource Accreditation and Requirements with initial focus on Load Modifying Resources (LMRs). A. MISO accredits resources on an annual basis reflecting their expected performance and ability to serve load. Traditionally, accreditation has focused on the expected performance of units during Summer peak conditions, considering their risk of forced outages, and establishing their must offer requirement if they clear in the Planning Resource Auction. As a result of this legacy methodology, some resource types today can clear as Planning Resources with requirements that state they must only be available in the Summer during times with capacity concerns (e.g., declared Maximum Generation, or MaxGen, Emergencies). This is the case, for example, with resources such as LMRs. However, in practice, the use of these emergency only resources has been limited by several factors, including emerging needs outside the Summer season availability obligation and extended advance deployment notice requirements (up to hours) that mute the effectiveness of many resources during emergency conditions. Additionally, because no testing regime exists for Demand Resources ( DR ), which comprise a subset of these LMRs, the lack of actual deployments reduces certainty of performance of these resources during emergency events, leading to further risks to the system when depending on this sub-set of LMRs. Seasonality The majority of recent (since 0) MaxGen emergencies have occurred outside of the Summer season, with short notice due to higher than anticipated forced outages and load. These circumstances may not align well with the characteristics of LMRs. As mentioned previously, LMRs

39 0 0 are only obligated to be available during the Summer season, so their support during non-summer events is dependent upon voluntary offers by each unit. Notice Requirements Additionally, LMRs may request up to twelve hours of notice before delivering needed resource characteristics. While other non-emergency resources may have similarly long lead times, those resources have daily must offer requirements into the Day Ahead market. In contrast, the use of longer-lead LMRs requires declared Emergencies, and MISO s Emergency operating procedures currently require several actions before a MaxGen Emergency is issued. Testing Nearly all resources that clear in the MISO resource adequacy construct have annual testing requirements. These testing requirements demonstrate that each unit can deliver its committed capacity while also providing staff opportunities to work with MISO to ensure seamless deployment and communications logistics related to the use of the resources. However, Demand Resources do not have annual testing requirements. This has led to situations where resources that have never been deployed through MISO calls are required to respond quickly and accurately in a critical emergency situation without practice. Moreover, during past events MISO has experienced deviations from established processes by some

40 0 LMRs. For example, some LMRs in the September 0 events did not acknowledge and use the correct reporting method during the emergency. More broadly, other resources in MISO, both emergency only and nonemergency, are expected to offer to MISO their best availability on both a daily and seasonal basis. For instance, a non-lmr resource that can start up in four hours is required to offer that four hour start up as part of its resource offer parameters. An offer that was not its best capability might be considered physical withholding under current rules. These non-lmr resources are also required to make themselves available for dispatch in all seasons unless they are physically unavailable. By contrast, LMRs may, but are not required to, offer their availability throughout the year regardless of their physical capabilities. Similarly, LMRs may choose any response time up to hours regardless of whether this response time is tied to any physical, regulatory or contractual constraint. As such, aligning resource accreditation and requirements for LMRs will help bridge the gap between how LMRs are expected to perform and requirements for other Planning Resources on the MISO system, incenting LMRs to provide value throughout the year based on their best capability. This goal is furthered by the changes to LMR requirements described below and in the testimony of Mr. Timothy Aliff. MISO September Maximum Generation Event Overview, October, 0, available at:

41 0 Q. Please describe the industry trends MISO has identified through its RAN efforts that will continue to impact MISO s operational challenges. A. At least five important trends are impacting the MISO system. These trends are increasingly difficult to manage in the operating timeframe throughout the year, and it is expected that they will become more challenging in upcoming years, to the point of threatening reliability. Continuation of these trends is expected and will increase the potential to impact reliability going forward as a result of potential mismatches in resource availability and need. As a result, reforms to the process through which capacity resources are converted to available energy are necessary at this time. Trend : Aging and retirement of the portfolio s generating units and the resulting impact on MISO s operations. Retirements and increasing generator outage levels (both planned and forced) require MISO to operate with less available capacity than in the past. The effect of this trend is to reduce the redundancy provided by excess resource availability. For example, daily average energy offers were down GW in Planning Year 0/ over Planning Year 0/. This reduction reflects a GW net resource retirement and a GW (%) increase in the average MWs on outage during those Planning Years. 0 Trend : Generator outage correlation.

42 The MISO Region has year-round load and supply needs that have historically been served by a Summer-focused capacity commitment. Recently, lower overall capacity levels and higher generator outage rates have reduced available capacity in non-summer periods. As a result, MISO has seen emergency conditions tied to both planned and forced outages increase during non-summer periods. This trend imposes a growing challenge to ensure sufficient available capacity in those non- Summer periods. 0 Trend : Growth in demand side and other emergency-only capacity as a percent of the overall portfolio. As shown by the graph below, nearly GW of emergency-only Planning Resources were cleared to meet MISO s capacity needs in 0 in the form of LMRs. This represents a substantial increase over prior years and equals % of the Summer peak load forecast and can exceed % of the non-summer shoulder period load when non-emergency resources traditionally plan their maintenance. Data as reported in Generator Availability Data System (GADS).

43 ,000. GW UCAP of Registered LMRs 0,000 0 to hrs BTMG Firm Service Level DR,000,000. to hrs Targeted Reduction DR Emergency only,000,000. to hrs hrs DR Metered BTMG 0 Lead Time Product Type Meas. Method Resource Type As discussed further below, these approximately GW of resources are generally not offered to MISO s operators during non-summer critical system conditions, leading to increased operational risk. Trend : Growing reliance on intermittent or unscheduled resources. 0 As the resource fleet has evolved, the MISO Region has become more reliant on uncertain, uncommitted resources during tight operating periods. The chart below describes the recent reliance on non-dispatchable and non-committed supply resources. The circled events show times when the margin for operational balance between supply and demand was nearly zero and resources to serve load would have been below zero, but for energy delivery from these uncertain supply sources. 0

44 This volatility places an increasing premium on resource flexibility and intra-day scheduling in the operating timeframe Trend : Growth of variable energy resources as a major element of the fleet. Trend will be further exacerbated by the projected growth in variable energy resources, as shown in the chart below. This resource category, by its very nature, has different characteristics than the legacy Planning Resources they are replacing.

45 0 Understanding and planning for the implications of renewable resources will require further assessment to explore how best to manage operational reliability while depending on a larger fleet of capacity resources that must be forecast for operations rather than dispatched. Q. Have these trends impacted MISO s operations? A. Yes. The effect of these trends is a substantial increase in declared emergencies in the past few years. Specifically, in the two and a half years since June, 0 there have been nineteen () MaxGen declarations, substantially all of which have occurred during non-summer periods. By contrast, there were zero (0) MaxGen declarations in the two and a half years prior to June, 0.

46 III. MISO RESOURCE ADEQUACY AND OPERATIONAL CHALLENGES 0 0 Q. Please describe MISO s current resource adequacy construct. A. In accordance with MISO s Resource Adequacy Tariff provisions in Module E-, Load Serving Entities ( LSEs ) procure sufficient resources to meet their forecast system-wide coincident peak load, plus a reserve margin, for the coming Planning Year. MISO works with relevant regulatory authorities and Market Participants to establish a Planning Reserve Margin ( PRM ), which defines the percentage volume of resources required by each LSE above its peak load to reliably meet that demand when considering risk factors such as generator forced outages and weather uncertainty. By procuring resources to meet this margin above peak load expectations, MISO and LSEs intend to ensure the MISO Region is resource adequate in all time frames. MISO also establishes capacity requirements for each Local Resource Zone ( LRZ or Zone ) to demonstrate where capacity must be located due to local resource needs and transmission limitations ( Local Clearing Requirement or LCR ). Based on these considerations, the PRA clears resources to meet both regional and local requirements respecting transmission limitations to ensure capacity can reliably meet customer loads both in each Zone and across the MISO Region. Section A. of the Tariff.

47 0 0 Q. How is the capacity cleared in the Planning Resource Auction converted into energy in for daily operations? A. Capacity Resources that clear the PRA generally must submit offers for the Installed Capacity value of the resource into the Day-Ahead energy market and certain Reliability Assessment and Commitment ( RAC ) processes for each Hour of each day during the Planning Year. This requirement is commonly referred to as the must offer requirement. There are some limited exceptions when the must offer requirement does not apply; for example, when a Capacity Resource is unavailable due to a forced or scheduled outage or its output is derated due to temporal, operational or seasonal conditions it is not required to offer its capacity into the Day-Ahead or Real-Time energy market. LMRs, however, do not have annual must offer requirements and instead are only required to be available to MISO in the event of emergency conditions up to five times (four hours per event) during the Summer months of June through August. Q. How are LMRs deployed to serve MISO load? A. As expanded upon in the testimony of Mr. Aliff, LMRs are called upon during step of MISO s emergency operating procedures, as shown in the Figure below. The goal of MISO operations, in these emergency conditions, is to utilize resources whose notice requirement allows them to deliver energy or load curtailment during the projected hours of an Emergency event. Section A. of the Tariff

48 0 Q. Please describe the operational challenges MISO is experiencing. A. MISO s resource adequacy and capacity conversion mechanisms date to a time when the region had generation capacity well in excess of the Planning Reserve Margin Requirements. They also date to a time when almost none of the supply fleet was intermittent in nature and when fewer LMRs participated in MISO s resource adequacy construct. To date, demonstration of capacity based on the forecast coincident Summer peak plus a reserve margin has enabled Load Serving Entities to serve firm load throughout every Planning Year. However, changing market conditions and fleet evolution have resulted in a resource portfolio with altered operational characteristics and less available capacity overall. Under these evolving conditions, MISO has seen an increase in Maximum Generation Emergencies (MaxGen alert, warnings, or events), including an emerging trend for emergency conditions outside the traditional Summer peak period. Given these changes, MISO must evaluate alignment of resource availability and need to determine how today s processes for the conversion of committed capacity to

49 energy enables reliable and efficient operation of the Bulk Electric System today and in the foreseeable future. IV. MISO s PROPOSED NEAR-TERM SOLUTIONS 0 0 Q. What is MISO focusing on in the near-term? A. This filing, along with the concurrently submitted LMR proposal, is intended to reduce the severity of emergency events, allowing MISO and stakeholders sufficient time to design more holistic, long-term solutions. The near-term items include process improvements to the requirements, testing, and operational procedures to call LMRs. Q. Why is MISO proposing these solutions now instead of waiting to file a longer-term, holistic solution? A. The proposed improvements to MISO s LMR management and testing are designed to deliver immediate benefits for the 0/00 planning year. Their design has a minimal impact on MISO s software and systems and will not prejudice or preclude the development or implementation of more holistic solutions. In short, MISO can implement the proposed LMR solutions now to address immediate operational challenges that have emerged in the last two years and reduce the frequency and severity of emergency events, while also supporting efforts to develop longer-term solutions. Q. What are the key components of MISO s proposal? A. MISO is proposing two independent process improvements:. LMRs will be obligated to offer their best seasonal availability and shortest notice timeline in times of Emergencies throughout the year,

50 0 including provisions to respond to calls made in anticipation of imminent (within hours) system emergencies; and,. Demand Resources that have not performed in response to an event dispatch in a given Planning Year would be obligated to test at least once annually, unless waived pursuant to defined exceptions. Q. How will these process improvements provide value? A. To reliably serve customers in all hours of the year, MISO relies on efficient conversion of committed capacity to energy, which is especially critical in light of the narrowing gap between load and the increasingly intermittent resource supply. However, the increased occurrences of emergency operations over the past two and a half years (nineteen since June 0, with the majority of these occurrences outside the Summer months) underscore the importance of near-term action. An increase of to 0 GWs of available capacity, which equates to % of the capacity committed in the MISO Region, would have avoided or dramatically reduced the severity of all of the recent emergency events, as shown for events from June 0 through May 0 in the figure below.

51 0 The proposed process improvements, in aggregate, will provide necessary relief by increasing forward knowledge to predict and avoid more emergency conditions by better utilizing resources during or in anticipation of emergencies, reducing the severity of such conditions. Specifically, improvements to the LMR capability, DR testing, and operating practices for calling LMRs will increase the availability of these resources during emergency conditions, reducing the severity of such events. Q. How does the current behavior impact resource risk? A. MISO s current Loss of Load Expectation ( LOLE ) process makes several assumptions in regards to planned outages and Load Modifying Resources. The LOLE model optimizes the way planned outages are scheduled throughout the year as part of the methodology and utilizes LMRs based on their availability, as reported by Market Participants. Based on these assumptions, LOLE risk would occur solely in the Summer, during times with the highest load. This risk is shown in the green bars in the chart below and results in the current.% resource requirement. Information gathered from Market Participants in the Module E Capacity Tracking Tool ( MECT ).

52 0 These resource calculations also assume optimal availability of generation resources, through efficient outage scheduling, and they assume no limitations to the reported availability of LMRs. However, by modeling sub-optimal outages scheduling, similar to current generator owner behavior, and assuming the worst case scenario that LMRs are not available or have insufficient lead time to support emergency events in non-summer months, the LOLE risk shifts from the Summer to several Winter months as well as September. This is documented in the blue bars of the chart and results in a 0.% resource requirement. Without modifications to outage scheduling behavior (expected to be filed during January 0), and the improved use of Load Modifying Resources, the resource requirement could increase by nearly.% assuming the additional resources would not also become unavailable at crucial times. The RAN process improvements including the LMR related changes included in the two filings

53 0 0 submitted today and the forthcoming changes to outage scheduling are intended to address these concerns without increasing resource requirements. Load Modifying Resources Q. How is MISO changing the requirements of Load Modifying Resources? A. First, MISO is proposing that all LMRs should provide and operate to their physical capability including: () the shortest time required between notification and deployment; and, () their availability for dispatch when physically capable throughout the year. This capability would be appropriately limited by regulatory retail tariffs and a two-year exception would also be granted for other relevant commercial contractual limitations. For example, an LMR that can provide output in December would be required to do so for a December Emergency event. Conversely, an air conditioning load reduction program would not be obligated to deploy during cold weather Emergencies if not physically able. Similarly, a unit that cannot notify, staff, and deploy within two hours would not be required to be available on two hours notice. This capability would be demonstrated through a staggered documentation requirement. LMRs with greater availability and/or lower deployment response times would have lower or no documentation requirements describing their physical or contractual limitations. Second, MISO will improve operational procedures to call Load Modifying Resources in anticipation of Emergency conditions. In these situations, an LMR with a hour response time would be required to begin deployment procedures hours prior to a predicted event, and MISO would then confirm, or withdraw, the Scheduling Instructions, no less than hours prior to the anticipated event. 0

54 0 0 More information on these improvements is described in the testimony of Mr. Aliff. Q. When will MISO implement the proposed LMR availability improvements? A. Requirements for LMR performance are established through Module E- of the Tariff and such resources commit to those requirements through clearing in the Planning Resource Auction ( PRA ) each year for the subsequent Planning Year that begins on June st following the PRA. As such, MISO is proposing that the LMR availability improvements are effective February 0, 0, to allow certainty in advance of the 0/00 PRA administered in the spring, and to create commitments for the 0/00 Planning Year beginning on June, 0. This timeline will allow MISO to review resource qualification, and resources to factor in new requirements into their offers in the PRA, in March 0. The new requirements for LMRs would begin to improve system reliability as early as June 0, with the start of the new Planning Year (and the start of the new requirements that the LMRs committed to through their Planning Resource Auction offer). Q. How will these process improvements provide value? A. The LMR improvements will primarily increase the efficient use of those resources during Emergencies, with a secondary benefit of improved forward transparency. The forward transparency will occur during the LMR registration, where Market Participants will enter their LMR output for the upcoming year, including any seasonal variations and notification timelines. This data will then be adjusted throughout the year as needed and available for MISO operations on a daily basis. Changes to the LMR procedures will also reduce the severity of

55 0 0 Emergency events through providing forward transparency on available Emergency-only resources and through the more efficient utilization of these LMRs. The improvements will also increase the usability of the resources by providing, in many cases, availability throughout the year and shorter deployment notice requirements ahead of a MaxGen event. More information on these benefits is included in the testimony of Mr. Aliff. Demand Response Testing Q. Is MISO proposing testing requirements for Demand Resources? A. Yes. MISO proposes that Demand Resources will be obligated to perform an annual physical real power test, unless limited by applicable retail tariff limitations (for as long as such provisions exist), or relevant commercial contractual provisions (for a two-year transition period). Market Participants may waive this testing requirement by instead opting for an increased penalty in the event of non- or under-performance during an actual Emergency event, as further described in the testimony of Mr. Aliff. Q. When will MISO implement the proposed improvements to DR testing? A. MISO is proposing implementing DR testing requirements for the 00/0 Planning Year. Today s filings, and providing certainty in advance of the start of the Planning Year, will allow Demand Resource owners to coordinate with their resources and plan testing procedures in advance of testing opportunities which may occur during the Summer 0. Q. How will these process improvements provide value? A. The requirements to test will validate that the DR is able to deliver their expected output by testing processes and output that may not have been regularly used (or

56 0 0 not used at all during the time the DR participated in MISO). Even resources that qualify for an exception to testing or waive such requirements will be obligated to attend at least one LMR drill annually, providing additional practice and touchpoints between DR personnel and MISO staff. Lastly, the addition of a DR testing requirement will bring further parity between Demand Resources, which currently do not have to perform real power tests, and all other resources, including Behind the Meter Generation LMRs, that have annual real power testing requirements. V. STAKEHOLDER ENGAGEMENT Q. How has MISO addressed RAN with stakeholders? A. As previously referenced, RAN discussions are rooted in issues that have been shared with stakeholders as early as 0. The nature of and discussions about the causes of these issues have gained momentum in 0 and 0 with assignment through the MISO stakeholder process and the publication of three white-papers the first in Q 0 and including an evaluation whitepaper in the fall 0 that described a gamut of short and long term potential solutions. Discussions early on in the process informed two detailed issues whitepapers that described key trends and their impacts on operational sufficiency. Subsequently, MISO published and continued stakeholder discussions through a RAN focused solutions whitepaper that laid out a range of improvements to address the identified issues for short term and long term future filings. Key topics were also discussed during the spring and fall of 0 at two sessions of the most senior stakeholder committee; the MISO Advisory Committee in their Hot Topics session attended by the MISO Board of Directors. This allowed MISO, including

57 0 Board Members, to hear and collect advice and feedback directly from the stakeholder sectors on energy sufficiency and generation outages. Additionally, multiple Reliability Subcommittee meetings and workshops further refined these potential solutions into a near term proposal, with discussions over detailed design and Tariff language spanning four formal and many more informal meetings with stakeholders. Although the four month stakeholder process on detailed short-term fixes may be considered by some to have been compressed, the nature and urgency of the issues being addressed, and the need to implement at least the short term solutions in advance of the 0/00 PRA, supports the urgency of these filings at this time. A complete list of this stakeholder outreach is included as Exhibit A to my testimony. VI. CONCLUSIONS AND RECOMMENDATIONS 0 Q. How will this proposal enhance reliability and transparency? A. As discussed previously, over the past five years, MISO has experienced an evolution in its generation portfolio from a coal and nuclear dominant fleet to an increased mix of intermittent and emergency only resources. At the same time, generation retirements have caused MISO to operate with steadily decreasing actual capacity margins each year, moving us closer to minimum reserve margin

58 0 0 requirements. This has led to diminished operational flexibility, which was historically provided by excess capacity. Further, increasing forced outage rates and high correlation in the timing of planned outages and derates have created resource risk outside of Summer peak time. Operating near the minimum margin requirements, along with an increased reliance on variable or emergency only resources, has increased risks to the reliable and efficient operation of the Bulk Electric System due to the conversion of capacity acquired through Resource Adequacy Requirements to energy in real-time. The near term RAN process changes will provide efficiencies in the use of Load Modifying Resources and, in the near future, will provide improvements in planned outages, leading to enhanced incentives and system transparency. Together, these modest changes provide just and reasonable mechanisms to reduce the system risk through avoiding or reducing the impact of emergency events. Additionally, these changes focus on improving the use of existing units providing relief starting in June 0. Q. How will these process improvements provide a platform upon which to build further solutions? A. The proposed process improvements build upon existing processes to increase the value of resources currently used to serve MISO load. For example, changes on LMR performance give great deference to the physical characteristics of these resources and to the retail tariffs governing such resources as well as providing a transition for non-regulatory, commercial contracts to be renegotiated. Testing requirements for Demand Response resources also defer to retail tariffs and allow for a transitional period for non-regulatory contracts, while also providing a

59 method for DR to waive their testing requirements. As such, the LMR changes will provide more certainty around the use of the existing fleet, without creating immediate disincentives for the continued participation of such resources or instituting a hard cap limiting such resources as in other markets across the country. Q. Does this conclude your testimony? A. Yes, it does.

60 AFFIDAVIT OF JEFF BLADEN Jeff Bladen, being duly sworn, deposes and states that he prepared the Testimony of Jeff Bladen, and the statements contained therein are true and accurate to the best of his knowledge and belief. SUBSCRIBED AND SWORN BEFORE ME, this cfjbday of December, 0. State oflndiana, County of t:-k;.,j\"--l lw RHIANNON RENA SHELLEY Clinton County My commission Expires Septembel, 0 My Commission Expires: Id l / d{')~ Co""'--µ_~ -D!::) -'~

61 Exhibit A

62 DATE OF MEETING STAKEHOLDER GROUP // Reliability Subcommittee /0/ Advisory Committee // Reliability Subcommittee PRESENTATION LINK %0RSC%0Item%00%0LMR% 0Issues%0Whitepaper00.pdf %0RSC%0Item%00%0RAN0.pdf %0AC%0Item%00%0Hot%0T opic%0intro+questions%0energy %0Supply%0Sufficiency0.pd f %0RSC%0Item%00%0RAN% 0Overview.pdf NOTES LMR Issues Whitepaper includes near-term and intermediate actions for stakeholder consideration Stakeholders provided guiding principles for MISO s evaluation and solution development efforts, a focus for LMRs on: o Ensuring accuracy of reporting and streamlining tools o Support for increased use of LMRs with needed characteristics o Recommendation to work with state regulators on characteristics and requirements Stakeholder hot topic discussion focused on energy sufficiency. Key themes included: MISO must have assurances that emergency resources will be available when they are needed MISO must use emergency-only resources appropriately Exploration of a new emergency resource type and design is prudent MISO should consider providing more compensation to emergency-only resources with certain attributes MISO outlined four near-term focus areas for RAN: Ensure outage process matches resource expectations with commitments Align accreditation and expected operating parameters, with an initial focus on Load Modifying Resources Evaluate PRA reforms, with a focus on needs throughout the year and link to availability Ensure flexible resource availability to address changing fleet characteristics

63 // Advisory Committee 0// Reliability Subcommittee // Reliability Subcommittee %0AC%0Item%00%0MISO% 0Intro%0to%0Hot%0Topic.pdf %0RSC%0Item%00%0Generati on%0outage%0coordination%0h ot%0topic%0recap00.pdf %0RSC%0Item%00%0RAN% 0Eval%0Whitepaper%0Summary 00.pdf %0RSC%0Item%00%0RAN% 0Presentation%0- %0MR0.pdf LMR gaps focused on availability of resources, tools, and information provided by resources Stakeholder Hot Topic discussions dealt with generation outages: A desire for near-term (year end 0) solutions was expressed in conjunction with work on medium and long-term items. Some areas received broad support, such as seasonal Resource Adequacy, while others, such as outage coordination roles, had mixed views Discussion of stakeholder feedback on the solutions in the evaluation whitepaper and additional solution ideas Stakeholders inform our plan to deal with LMRs and outages in near-term at RSC with holistic longer term solutions occurring in 0 in the RASC and MSC MISO requests formal feedback on: ) LMRs ) Outages, ) Longer-term holistic solutions o LMR feedback focused on solutions which would address gaps in response time, expectation/accreditation, testing requirements, and annual performance MISO introduced a multi-phase approach with a goal of implementing short term fixes in early 0 Focus on near term improvements with desired impact by Spring 0 Near Term Objective: Improved availability of and access to 0 GWs will reduce risks LMR best capability proposal: o Response notice and seasonal availability set to physical and operational capability

64 // Reliability Subcommittee (Workshop) %0RAN%0Workshop%0Presentat ion.pdf o LMRs called in anticipation of Emergency declaration [Stakeholder suggestion from Hot Topics discussions] Testing requirements for DR comparable to other resources Conducted a detailed discussion and gathered advice for RAN short term fix proposals. Stakeholder feedback was used to modify proposal: Change procedures to call LMRs in expectation of an Emergency [adopted previously] Limit notification times for LMRs with an exception process and Grandfather or provide long transition for any changes [proposal now includes exceptions to physical capability for retail tariffs, -year contractual transition] The true capability of my resource is competitive info, don t want to disclose [Tiered documentation with most available not required to document] Allow MP and LSE to choose when and how to test [adopted] A test should count as a call [adopted] Successful deployment should count as a test [adopted] Exceptions to testing for retail tariffs and existing contracts [adopted] LMRs should be required to test [Personnel from Demand Response who do not test must participate in one LMR drill per Planning Year] If preceding with testing requirement which can be expensive provide an opt out with x penalty [adopted] If there s an opt out from DR testing if agree to x LMP penalty than need credit requirements to reflect exposure [adopted]

65 // Reliability Subcommittee // Reliability Subcommittee %0RSC%0Item%00%0and%0 0%0RAN%0Detail%0Review.pdf Link to posted redlines: liability-subcommittee-rsc--- december--0/ How does calling in anticipation work for LMRs only able to deploy in an emergency [MISO will convert anticipated to declared emergencies at least hours prior to the event] Resources can incur costs leading up to an anticipated deployment [adopted, EDRs will be eligible to recover costs incurred subject to IMM review] Waivers will be needed for PRA deadlines in 0 [adopted] RAN Detail Review [includes some of the feedback and modification listed under / above ] Module C and Module E- redlines posted Line by line discussion of posted redlines Feedback, clarification requests, suggested changes MISO posted updated tariff language / and gave response on stakeholder call to delay Outage Coordination filing

66 Tab D

67 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION PREPARED DIRECT TESTIMONY OF TIMOTHY ALIFF 0 0 I. PROFESSIONAL BACKGROUND AND QUALIFICATIONS Q. Please state your name, current position, and business address. A. My name is Timothy Aliff. I am the Director of System Operations for the Midcontinent Independent System Operator, Inc. ( MISO ). My business address is 0 City Center Drive, Carmel, Indiana. Q. Please describe your educational background and professional experience. A. I hold a Bachelor of Science in Electrical Engineering from Purdue University and have 0 years of management, planning, and operations experience in the electric utility industry. Since 00, I have been employed by MISO in various professional and managerial positions, including as Engineer, Technical Manager, Manager of Central Region Operations Engineering, Senior Manager of Central Region Operations, and Director of Reliability Planning. I was appointed to my current position, the Director of System Operations, in September 0. Prior to joining MISO, I was employed by the Mid-American Interconnected Network ( MAIN ), where I was responsible for performing available transfer capability ( ATC ) studies for daily, weekly, and monthly ATC posting to the MAIN Open Access Same-Time Information System. Q. Please describe your job responsibilities as they relate to this filing. A. As the Director of System Operations, I am responsible for Emergency Operating Procedure oversight and I directly manage the Shift Managers that implement a majority of the Emergency Operating Procedures.

68 II. INTRODUCTION AND PURPOSE OF TESTIMONY 0 0 Q. What is the purpose of your testimony? A. My testimony supports the revisions MISO is proposing to the Resource Adequacy Requirements found in Module E- of the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( Tariff ). If accepted by the Federal Energy Regulatory Commission ( FERC or Commission ), the proposal will support the reliable operation of the MISO system through promoting the transparent and efficient usage of emergency-only Load Modifying Resources ( LMRs ). My testimony builds on the discussion of the need for the MISO proposal described in the testimony of Mr. Jeff Bladen. I describe the principal Tariff revisions included in the MISO filing and explain how they will accomplish the desired reform objectives. Q. How is your testimony organized? A. My testimony is organized as follows: Part I explains my professional background and qualifications. Part II provides a brief introduction and explains the purpose of my testimony. Part III explains the current use of Load Modifying Resources and related limitations. Part IV discusses the key elements of MISO s proposal. Part V describes the benefits MISO expects from this proposal. Part VI contains my recommendation to the Commission to adopt the MISO proposal as filed.

69 III. The Current Use of LMRs and Related Limitations 0 0 Q. What are Load Modifying Resources, and how are they obligated to serve MISO load? A. LMRs consist of Demand Resources ( DR ) and Behind the Meter Generation ( BTMG ). Both resources are relied upon to serve MISO load during emergency conditions, with DR including interruptible, direct load control, or other load reductions during emergencies, and BTMG resources including generators located behind Commercial Pricing Nodes ( CPNodes ) that are not included in dispatch instructions from MISO. For LMRs that clear in the PRA, DR must be capable of being interrupted and BTMG must be capable to deploy at the accredited MW level at least the first five () times, if requested, during the Summer Season (when called upon by the Transmission Provider for an Emergency) of any Planning Year for which the LMR receives credit as a Planning Resource. Q. What are the qualification requirements of LMRs in the PRA? A. The qualification requirements for LMRs can be best separated into requirements for BTMG and DR. Behind the Meter Generation BTMG shares many similar qualifications with the majority of MISO Capacity Resources, including testing, outage reporting requirements, and minimal performance standards. These qualifications are expanded upon below. Testing: BTMG resources are required to conduct a Generation Verification Test Capability ( GVTC ) test each Planning Year to demonstrate their ability to deliver energy when called upon. The results of these tests are one factor in the

70 0 0 amount of capacity accreditation a particular BTMG may receive in the following Planning Year. Outage Reporting: BTMG resources of at least 0 MWs must report generation outage and derates through the NERC Generator Availability Data System ( GADS ). Forced outages and derates are then utilized to calculate the unforced capacity credit that may be granted to the resource. BTMG below 0 MWs without such data are granted a class average forced outage rate for capacity accreditation purposes. Requirements: BTMG resources must provide their output with no more than hours of notice. They must be able to sustain their energy production for at least four continuous hours during the first five times requested by MISO during Summer Season emergency conditions. Demand Resource DR qualifications include aggregation requirements and capability demonstrations (including but not limited to real power tests) with similar minimal performance standards. These qualifications are expanded upon below. Testing: A Market Participant must demonstrate their demand reduction capability on an annual basis through either: (i) a real power test; (ii) by providing operational data; or, (iii) through another method subject to MISO s approval. This test level sets the baseline for the DR s capacity accreditation value. Aggregation: Resources must be greater than or equal to 00 kw; smaller resources may be aggregated to meet these standards. Requirements: DR must be able to either be scheduled for a specified Demand reduction or moved to a specified firm service level with no more than twelve

71 0 0 hours of notice. They must be able to sustain their energy production for at least four continuous hours at least for the first five times requested by MISO during Summer Season emergency conditions. Also, this Demand reduction should not have otherwise occurred within the next hours. Q. Do LMRs have obligations outside of the Summer? A. No. LMRs do not have an obligation under the MISO Tariff to be available outside of Summer. However, LMRs may voluntarily report their availability through the MISO Communication System ( MCS ) tool throughout the year. The MCS is the tool MISO uses to communicate to Market Participants with LMRs, assess LMR availability, and schedule LMRs. The performance obligations for a given LMR deployed in an event are based on their reported availability for the Operating Day. Q. Do LMRs have minimum notice requirements? A. Yes. An LMR s notification requirement may not exceed twelve hours. However, an LMR may voluntarily report a shorter notification timeframe, which would then be used to notify the resource for deployment via Scheduling Instructions. Q. How does MISO call on LMRs? A. LMRs are called on through the MCS to help MISO restore Operating Reserves during an anticipated operating reserve deficit (a Maximum Generation event). LMRs and other resources are made aware of impending capacity emergency conditions through Advisories, Alerts, and Warnings prior to a Maximum Generation Event declaration. LMRs can also be implemented to mitigate Transmission System Emergencies or Local Transmission Emergencies if the deployment of the LMRs will help to reduce flows into constrained areas.

72 LMRs are called upon during event step of MISO s emergency operating procedures, as shown in the Figure below. The goal of MISO operations, in these emergency conditions, is to utilize resources whose notice requirement allows them to deliver energy or load curtailment during the projected hours of an Emergency event. 0 More specifically, during a declared Maximum Generation Emergency Event Step or higher, MISO operators issue Scheduling Instructions for LMRs. These instructions require each LMR to deliver a specific number of MWs in accordance with their identified notification time and for a duration of up to four () hours, where the number of MWs requested may not exceed the availability the LMR has indicated in MCS. Scheduling Instructions are sent via the MCS. Scheduling Instructions are sent to LMRs More specifically, Steps and defined in Section 0..0 in Module C and the posted EOP are called MISO Market Capacity Emergency SO-P-EOP The EOP can be accessed at P-EOP-00-00%0Rev%0- DRAFT%0MISO%0Market%0Capacity%0Emergency_UNDER%0REVIEW.pdf

73 0 0 within the defined boundaries of the Emergency declaration at an LBA level, a subregional level, or system wide. Q. When does MISO call on LMRs? A. MISO declares a Maximum Generation Emergency Event Step b when it anticipates an operating reserve deficit, as noted above, but there are a number of earlier steps in MISO s emergency operating procedures. The Multi-Day Forward Reliability Assessment Commitment (MD FRAC) process assesses capacity sufficiency every day for the next seven days and sends out alerts to MISO operators when certain scarcity thresholds are reached. During these conditions MISO works with Generation Owners to increase resource availability. When MISO projects less than a % margin between availability and obligations (projected peak load plus required reserves) MISO can issue a non-binding Capacity Advisory raising awareness about the potential scarcity and encouraging generation resources to update their resource offers, including LMR offers through MCS. When projected margin falls below % (or below 00 MW in MISO South) MISO can declare Conservative Ops and enter the Maximum Generation Emergency portion of its emergency operating procedures allowing it to include emergency resources in its commitment processes. Q. What response time does MISO see reported for LMRs? A. The reported response time for LMRs varies widely from 0 to hours, as shown in the figure below. MISO Market Capacity Emergency, SO-P-EOP-00-00, available at:

74 ,000 0,000. GW UCAP of Registered LMRs 0 to hrs BTMG Firm Service Level DR,000,000. to hrs Targeted Reduction DR Emergency -only,000,000. to hrs hrs DR Metered BTMG 0 Lead Time Product Type Meas. MethodResource Type 0 Q. Is this response time sufficient to meet MISO s system needs? A. MISO has been able to manage through system emergencies to date. However, the utilization of long-lead emergency only resources has been limited, as stated previously. Currently, MISO operational procedures will activate resources closer to or during emergency conditions as the uncertainty of needing emergency procedures is reduced. This limits the usefulness of long-lead resources, as the emergency event is likely to be shorter than the lead-time needed to call the resource. Recent emergency events have been a result of short term operating stressors, such as the combination of a large forced outage with higher than normal load and high planned outages. As a result MISO is typically unable to issue Scheduling Instructions for LMRs requiring four hours or more of notice, limiting the amount of LMRs which may be used for any given event. For example, the LMR availability, for the entire MISO footprint, reported in MCS for December, 0 shows the following availability:,00 MWs in two () hours,00 MWs cumulative in four () hours

75 0 0 up to ~,00 MWs cumulative in twelve () hours More specifically, LMR performance in recent events may illustrate the impact of notice time on LMR responses. During two deployment events on January, 0, LMRs delivered MWs with four hours notice and MWs with six hours notice; during the September th 0 Emergency, less than 0 MWs were deployed due to a shorter notice time prior to the event. Q. What output has been delivered by LMRs during non-summer Seasons? A. The non-summer availability from LMRs varies. Some resources, such as air conditioning load reduction programs, may only provide demand relief during hot weather conditions. Other resources, such as industrial load, may have non-summer availability that is equal to their output during the summer months. In either instance, the output for each LMR during a given day is dependent on the lead time allowed to deploy the resource and the conditions on that particular day. It is unclear if the non-summer Season availability reported in MCS represents the true capability of LMRs that have cleared the PRA, as LMRs are not required to offer availability outside the summer. Additionally, the output from LMRs is directly limited by the notification given in advance of their deployment. Performance data from the three recent LMR deployments, which have all occurred in MISO s South region outside of the summer season, have indicated little availability without four or more hours of advance notice. LMR Performance During January 0 Maximum Generation Event, June, 0, available at:

76 0 0 Q. Is this output sufficient for MISO s system needs? A. LMRs, in combination with other resources, tools and procedures, have enabled MISO to serve firm load to date. However, on January, 0 and September, 0 MISO progressed beyond LMRs in its emergency operating procedures and instituted Emergency Energy purchases in order to serve firm load. MISO is increasingly concerned that the non-summer output from LMRs, or at least the lack of transparency to plan for resource risk outside of the summer, inhibits its ability to serve firm load in the MISO system throughout the year. More transparency on a monthly level outside of summer months will improve MISO Operators ability to better respond to changing system conditions during tight operating conditions during these periods. Q. How have LMRs performed in emergencies? A. MISO has had limited experience with calling on LMRs due to the following factors. First, as noted above, most emergency events have short lead times before making the declaration, and operational practices limit the use of long-lead resources for these emergencies. Additionally, the majority of emergency events have occurred outside of summer, where LMRs do not have an obligation to respond. Finally, all of the recent events have occurred in the South region; while most of the LMR fleet clearing the PRA is in the North or Central portions of the MISO footprint. Regarding timing, there is more availability (allowing MISO to send more MWs of Scheduling Instructions) when we have hours or more notice for an Emergency but this has been accompanied by underperformance of the Scheduling Instructions in aggregate as described below. In general, LMR s have over-performed their indicated availability in MCS for short notice events due to resource ramping to meet later targets and underperformed their indicated availability for longer notice events when the resources called on are expected to have 0

77 time to reach their full capability. The best example of this to date are the three consecutive events where MISO called on LMRs starting the morning of January, 0 and extending into January th. 0 The first event on January th was declared with little notice as significant forced outages occurred on top of abnormally cold conditions driving high loads and higher than normal planned outages. MISO issued LMRs Scheduling Instructions for four hours over the expected morning peak., MWs of LMRs cleared the PRA in the South for Planning Year 0/. Due to the short notice, MISO only issued Scheduling Instructions to the. MWs of immediately available LMR capability indicated in MCS for Hour Ending 0. LMRs actually delivered MWs that hour. Even at Hour Ending EST MCS only indicated. MWs of LMR availability relative to the, MWs that cleared the PRA. LMR delivery peaked at ~0 MWs in HE 0. LMR Performance During January 0 Maximum Generation Event, June, 0, available at:

78 Later, on January th, MISO again issued LMRs Scheduling Instructions to meet the anticipated evening peak. By issuing the instructions earlier despite the uncertainty involved hours in advance, MISO was able to call on more resources throughout the second event. As it turned out, conditions improved and the last two hours of the Scheduling Instructions were terminated. However, it can be seen again that there was over performance early in the event. Perhaps most notable, when the notice time allowed MISO to issue Scheduling Instructions for a greater portion of the LMRs clearing the PRA (~00 MWs out of,), there was significant underperformance in HE. 0 The persistence of extreme cold and Emergency conditions anticipated for the morning peak of January led MISO to call a third LMR event with even greater notice allowing for the full hour notification time by HE 0 EST. Scheduling Instructions started at MWs and rose to 0 prior to the last hours of the event being terminated due to improving conditions. Aggregate performance of the LMRs never matched the Scheduling Instructions ranging from 0 to 0 MWs of underperformance during the event.

79 IV. DISCUSSION OF THE PROPOSED REFORMS A. Overview 0 0 Q. Please summarize the key elements of MISO s proposal. A. MISO s proposal is broken into several components. These components, as described briefly below and expanded upon in the following section, increase the transparency and establish clearer requirements for LMRs, allowing for improved efficiency in their use to support MISO system reliability. This proposal is the result of many modifications that were developed in collaboration with stakeholders through discussions and multiple formal feedback requests in MISO s Reliability Subcommittee ( RSC ) meetings. Seasonal Capability: During the annual Capacity Resource registration process LMRs will be required to provide MISO with their availability throughout the year (up to the amount clearing the PRA). This seasonal availability will be used to prepopulate daily LMR availability in MCS to address stakeholder concerns about the burdens required to update these values for different seasons. Outside of the Summer, this availability can be limited by relevant obligations in retail tariffs. Additionally, MISO will account for commercial contract limitations in the 0/0 and 00/ Planning Years. Recognition of retail tariff and contractual limitations were important considerations for stakeholders that represent LMRs at MISO. Response time: During the annual Capacity Resource registration process LMRs will provide MISO with the shortest notification time that can be consistently met; this timeline will be prepopulated into MCS and used to schedule on LMRs during Emergency conditions. Throughout the year, this availability can be limited by relevant obligations in retail tariffs. Physical limitations, such as an

80 0 0 increase in the required non-summer response timeline for LMRs only staffed during the summer, will also be allowed. Additionally, MISO will account for commercial contract limitations in the 0/0 and 00/ Planning Years. Recognition of retail tariff and contractual limitations, along with the potential for time needed for staffing outside summer, were important considerations for stakeholders that represent LMRs at MISO. Operational Processes: MISO proposes to issue Scheduling Instructions to LMRs for planned deployments in anticipation of system Emergencies as recommended multiple times in a variety of venues by MISO s stakeholders. Such notifications in anticipation of an Emergency will count against the total deployments required for a resource, increasing the opportunities to utilize LMRs for Emergencies while not increasing their obligation. Further, MISO proposes to extend the current cap of five deployments per LMR for the whole year so that the total number of obligated calls remains constant to mitigate stakeholder concerns that these resources would be called on excessively. Additionally, Emergency Demand Response EDR resources (which provide shutdown costs as part of their offer to MISO) called in anticipation of an emergency which is subsequently cancelled may recover costs prudently incurred to prepare for the planned deployment in anticipation of an Emergency. Stakeholders suggest this is necessary since they would not receive the revenues they expect when they curtail in line with their Scheduling Instructions for a declared Emergency. Q. What impact will these changes have on day-ahead must offer requirements? A. None. The modification to LMR requirements will not establish new day-ahead must offer requirements, as LMRs will not have to offer into the market. However, they will

81 0 0 modify operating requirements for LMRs, based on their non-summer availability and notification timeline to respond to deployment instructions. Q. What impact will these changes have on market monitoring and mitigation? A. The performance of LMRs during emergency events will continue to be measured against the information that is reported in the MCS. The process improvements will set such information to the capability of each unit, and market monitoring and mitigation will therefore focus on the performance of each unit against this capability. Additionally, IMM monitoring and mitigation is recommended to verify the appropriate recovery of costs incurred by EDRs to prepare for their deployment in the event an anticipated emergency does not materialize. B. Expanded Availability of LMRs Q. How does MISO propose to change the obligation of LMRs to be available in emergencies? A. MISO will clarify that LMRs are required to provide their expected seasonal availability and their shortest notification time from the initial communication request to deployment. Seasonal Capability: LMRs will provide MISO with their actual physical availability throughout the year in MCS. For example, a DR that aggregates air condition reduction would not be available in cold weather. This resource would then report that they have limited or zero availability in MCS even if they indicated availability for the season during registration. Response time: LMRs will provide MISO with their current minimum notification time in MCS. The notification timeline required may differ somewhat from the seasonal value provided during registration due to changes in factors such as: time to communicate to appropriate staff, time to staff plant, and the time to deploy

82 0 0 LMRs. The timeline provided in MCS will be used to call upon the LMR during emergency conditions. This process improvement will not significantly increase the obligations of the LMRs in the Tariff, as they are spelled out today. Each LMR will still have to respond during the Summer Season, and they will be obligated to no more than five calls during a particular Planning Year. Likewise, their deployment will still be required for a minimum of four hours for each call. However, the process improvement will provide better transparency into the actual operating characteristics of all resources, allowing MISO to better predict and access resources needed throughout the year. Q. How will best availability be determined? A. Market Participants will be required to inform MISO of their unit s seasonal capability and shortest notification timeline during the annual registration process. To be clear, the Market Participant makes this determination and supports with reasonable documentation, as noted below. This availability should take into account the safe and reliable operation of the LMR. MISO will then review and validate this information based on the documentation provided, with the occurrence and magnitude of such documentation varying inversely based on the indicated availability of the LMR. This process will be similar to other methods MISO uses to capture and analyze data. For example, current DR testing requirements require the review and validation of testing data, with alternate testing methods subject to the approval of the Transmission Provider. Must offer requirements for other capacity resources are set equal to the unit s physical availability, when forced outage rates, seasonal limitations, and See, e.g., Sections A... and A.. of the Tariff.

83 0 0 demonstrated output are considered. MISO will review and validate the sufficiency of such documentation for each LMR prior to the PRA to provide certainty to LMRs about their obligation to perform in advance of their PRA offers or plans to include LMRs in a Fixed Resource Adequacy Plan ( FRAP ). Q. How will MISO review documentation supporting these capabilities? A. MISO will review documentation based on seasonal availability and timeline provided by the Market Participant, based on the levels of availability that will be included in the BPM for Resource Adequacy. Separate documentation reviews will be conducted for seasonal availability and deployment timelines. Documentation should provide affirmative relevant regulatory or contractual limitations. Documentation that is silent on greater seasonal availability or a shorter notice time will not qualify for a limitation. Q. Did MISO adjust the proposal to accommodate stakeholder feedback? A. Yes. As noted above, MISO adjusted the proposal due to stakeholder concerns in several ways. MISO has agreed to update the MCS with the value submitted during the registration process, reducing the updates required from stakeholders. Additionally, MISO is currently working on a schedule for more comprehensive reforms to the MCS, allowing for better internal and external ease of use. MISO also clarified that the proposal will not supersede retail tariff provisions, and a two year transition period was added for existing non-retail contracts, based on stakeholder feedback which stated that adjusting existing contracts could take months. See Section A. (in part): Market Participants [using Capacity Resources] must submit Self-Schedules or Offers for Energy, and Contingency Reserve if qualified, for the Installed Capacity value of the Capacity Resources converted to ZRCs for each Hour of each day during the Planning Year, in the Day-Ahead Energy Market and all pre Day-Ahead and the first post Day-Ahead Reliability Assessment Commitment process. This must offer obligation does not apply to the extent that the Capacity Resource is unavailable due to a full or partial forced or scheduled outage, in accordance with the BPM for Resource Adequacy and the BPM for Outage Operations.

84 0 0 C. Calling on LMRs in Advance of Emergencies Q. How does MISO propose to notify LMRs in advance of emergencies in line with their notification requirements? A. MISO s operational processes work to mitigate capacity insufficiency and avoid the declaration of Emergency procedures. This can limit the use of the approximately GWs of LMRs cleared in the last PRA. Many of those resources require notice hours in advance or they become unavailable. MISO considered several alternatives in developing the proposal. For example, MISO could access these resources by declaring emergency conditions up to twelve () hours in advance of expected need for an upcoming peak but this approach could significantly expand the duration of Emergency conditions. Alternately, MISO could seek to implement a requirement that all LMRs react to deployment with six hours or less of notice; however, this could preclude resources with valuable capabilities from offering in the PRA. Instead, MISO proposes to implement processes which notify LMRs in anticipation of expected emergency conditions as suggested by stakeholders. For example, MISO would notify all stakeholders that it has issued Scheduling Instructions to LMRs in anticipation of an Emergency in hours using the MCS. In parallel with this public notification, MISO would issue Scheduling Instructions to individual LMRs in the impacted areas with -hour notice requirements, and such resources would begin their deployment processes. In this scenario, longer lead resources will be called first; resources with shorter notification timelines would receive subsequent notification as required. MISO would declare an Emergency (MaxGen Event Step b for LMRs) no later than hours prior to its anticipated start. LMRs issued Scheduling Instructions in anticipation of an

85 0 0 Emergency would not be obligated to deploy if a sufficient Emergency is not declared two hours prior to the start of the Scheduling Instructions. MISO would evaluate the need for such resources periodically throughout the day and terminate the Scheduling Instructions for LMRs in the event MISO doesn t need them. Q. What will an LMR s obligation be if it receives Scheduling Instructions in anticipation of an Emergency? A. Under the proposal, LMRs would be required to meet their Scheduling Instructions unless an Emergency is not declared for their area two hours in advance of the start of the Scheduling Instructions or they are otherwise informed by MISO that they don t need to deploy. Q. Does a response to a notification count as one of the calls an LMR is required to be available for? A. Yes. Acknowledgement of the Scheduling Instructions in MCS will count as one of the five deployments required by LMRs, regardless of whether the anticipated Emergency is declared, unless the LMR fails to meet its Scheduling Instructions when obligated during a declared Emergency. Q. Will MISO compensate resources for such deployment? A. Yes. Resources that include shutdown costs in their offers (EDRs) will receive compensation for costs prudently incurred as they prepare to meet Scheduling Instructions, regardless of whether the anticipated emergency is declared. Such compensation will be subject to review by MISO and its Independent Market Monitor. Q. Did MISO adjust the proposal to accommodate stakeholder feedback? A. Yes. As noted above, MISO adjusted the proposal due to stakeholder concerns in several ways. MISO included any anticipated calls as part of the five calls required from LMRs annually to ensure the total number of obligated responses was not exceeded for any

86 0 0 LMR, and the ability for EDRs to recover shutdown costs, with MISO and IMM review of these costs, was included in the proposal. Additionally, MISO added a process step to confirm the anticipated emergency no less than hours prior to its commencement, to allow for additional notice for longer-lead LMRs. V. Expected Benefits from LMR Changes Q. How will these changes enhance transparency around availability of resources? A. The refinements to LMR requirements will provide greater transparency, both for resource planning and operational purposes. For example, resource planning studies rely on assumptions around resource availability throughout the year. Additional information on the ability of LMRs to support load throughout the year will increase the accuracy of resource planning tools, such as the loss of load study, allowing for a more complete picture into non-summer risk. The additional transparency around non-seasonal availability and response time will also inform operational planning as MISO moves into the operating day. Market Participants will continue to have an incentive to provide regular updates to their availability in the MCS tool, as their measurement and verification will rely upon accurate reporting of derates and outages. Additionally, more accurate timelines, paired with the improvements to call LMRs in advance of an emergency, will allow for the efficient use of all resources in the times where they are most vital (e.g., short-notice system emergencies). The added transparency of accurate forecasted availability of LMRs outside of summer months will help operators determine actual total emergency capacity of all resources. 0

87 0 Q. Will these changes increase the efficiency and use of LMRs in MISO? A. Yes. The changes to operational procedures will increase the efficiency and use of LMRs in MISO in three ways. First, the requirements for all resources to report their best notification time to MISO, rather than any notification time up to hours, will allow for resources to be called on more quickly in Emergency conditions. Second, the improvements to operational procedures, which will call on resources in advance of emergencies will increase the opportunities to use them during emergencies, as they will begin deployment in advance of the critical emergency. Third, the requirement to report their best availability outside summer, rather than zeroing out their availability, will allow for resources to be called on to address scarcity outside the Summer Season. VI. Conclusion and Recommendation 0 Q. In your opinion, is the MISO proposal just and reasonable? A. Yes. The LMR related filings provide an immediate solution to a concrete need for additional relief to reduce risks to reliability, allowing additional time for MISO to work with stakeholders to design more holistic market oriented solutions that effectively incentivize the alignment of resource availability with need. The proposed Tariff revisions will significantly improve the certainty of resources available to operators in the event of an Emergency. If adopted, the MISO proposal will provide a number of important benefits, including increased transparency in the planning and operational horizon, better alignment in testing requirements between DR and other capacity resources, and improved efficiency in the use of LMRs. Accordingly, I recommend that the Commission accept this RAN proposal as submitted. Q. Does this conclude your testimony? A. Yes, it does.

88 AFFIDAVIT OF TIMOTHY ALIFF Timothy Aliff, being duly sworn, deposes and states that he prepared the Testimony of Timothy Aliff, and the statements contained therein are true and accurate to the best of his knowledge and belief. SUBSCRIBED AND SWORN. BEFORE ME, thisl () day of December, 0. State oflndiana, County of )...\BJ\U / j& ; RHIANNON RENA SHELLEY Ctinton County. My CommissiOO Expires September, 0 My Commission Expires: { ]/d{j;).-r;;-