On November 7, 2014, the Commission denied Consumers Energy Company’s (“Consumers”) request for limited waiver of several MISO tariff provisions on the grounds that Consumers had failed to adequately demonstrate that the requested waiver would not cause undesirable consequences, such as harming third-parties. Consumers had filed its request for waiver in response to conflicting regulatory obligations under the MISO tariff and the EPA’s Mercury and Air Toxics Standards (“MATS”).
In its August 7, 2014 request for waiver, Consumers described its intention to suspend operation of seven coal-fired power plants (the “Classic Seven”), totaling 940.7 MW, in order to comply with the EPA’s MATS deadline of April 16, 2015. Consumers stated that it sought and received an additional one-year extension from the Michigan Department of Environmental Quality after it was informed by MISO that the Classic Seven would be needed for reliability beyond April 16, 2015.
Because the MISO 2015-2016 capacity planning year runs from June 1, 2015 to May 31, 2016, there is an approximately 6.5 week gap between Consumers’ MATS compliance date of April 16, 2016 and the end of the MISO planning year. In its August 2014 request for waiver, Consumers argued, among other things, that it is not permitted under the MISO tariff to withhold the Classic Seven from offering into the MISO Planning Reserve Auction for the 2015-2016 Planning Year, or to declare a forced or scheduled outage for the 6.5 week gap period. Consumers also claimed that the MISO Tariff does not provide a mechanism that ensures Consumers Energy will be able to purchase replacement capacity through the auction to cover the 6.5 week period. To address these challenges, Consumers requested that the Commission grant waiver of certain related provisions of the MISO tariff.
In denying Consumer’s waiver request, the Commission stated that one of the factors it considers in determining whether to grant a waiver is whether the applicant has demonstrated that the waiver would not have undesirable consequences, such as harming third parties, and that the petitioner bears the burden of justifying its request. The Commission concluded that in this particular circumstance, Consumers did not sufficiently demonstrate that the requested waiver would not have undesirable consequences, such as harming third parties. Specifically, the Commission noted that the Classic Seven’s aggregate 940.7 MW of generation represented approximately 14.5 percent of Consumers’ total capacity. While the Commission recognized that MISO had previously concluded that the Classic Seven were not necessary for reliability during the 6.5 week gap period after April 16, 2016, it found that Consumers had not provided the Commission with additional information needed to more adequately assess the impacts of the waiver.
As an example, the Commission noted that Consumers had not identified whether the utilities within its MISO zone had coordinated to provide generation outage schedules for April 2016 and May 2016 to MISO. The Commission stated that, given the magnitude of the capacity being suspended, such an analysis would enable the Commission to better assess the risk to supply adequacy during the requested waiver period. The Commission reasoned that, without this information, it could not make a determination as to whether reserves might fall below the required system reserve margin during the 6.5 week gap period and therefore, whether the waiver could cause undesirable consequences for third parties.
A copy of the Commission’s order may be found here.