MISO recently filed proposed Tariff revisions to implement the market procurement of Short-Term Reserves. Short-Term Reserve may be provided by online resources and offline resources that can come online and produce energy within 30 minutes. The Short-Term Reserve product design leverages features from existing reserve products, but is a separately cleared product serving Local, Sub-Regional, and Market-Wide needs. The product was recommended by MISO’s Independent Market Monitor who supports the filing.
Adding the Short-Term Reserve product to MISO’s markets is expected to provide operational flexibility when and where it is needed to reliably operate the Bulk Electric System. More efficient and co-optimized commitment, deployment, and dispatch in MISO’s Day Ahead and Real Time Markets will ensure efficient use of resources and is expected to reduce make-whole payment uplifts.
Three components of MISO’s reliability needs are addressed by the Short-Term Reserve product:
- Local – Driven by import limitations and the lack of flexible resources in certain local areas, MISO currently augments its normal practices to secure these local areas for the loss of two system elements.
- Sub-Regional – Primarily focused on MISO’s Regional Directional Transfer (RDT) obligation, which limits energy transfers between the North/Central and South sub-regions. Following a system event, MISO must ensure the availability of sufficient flexibility to manage inter-regional dispatch flows within RDT limits.
- Market-Wide – The need for resource flexibility to manage variability, unplanned deviations and replenishment of deployed reserves is currently addressed by existing system economics. Anticipated future system changes (e.g., increase in number of energy-limited resources) may decrease the available flexibility and/or increase the need for flexibility, necessitating explicit market-based management.
The addition of the Short-Term Reserve product to MISO’s Energy and Ancillary Services Markets will further strengthen MISO’s vision for reliable and economically efficient markets. The Short-Term Reserve product will:
- Increase efficiency in the MISO commitment processes related to Local, Sub-Regional and Market-Wide Short-Term Reserve needs;
- Improve transparency of the costs associated with satisfying Short-Term Reserve needs through Short-Term Reserve product prices;
- Align operational needs and markets to enhance reliability and ensure Short-Term Reserve response in needed locations; and,
- Better position MISO to withstand transitions in the resource mix that can increase the need for flexibility.