Calling the results of the Midcontinent ISO's 2017-2018 Planning Resource Auction "uneventful" during an April 14 conference call, Richard Doying, executive vice president of operations at MISO, said prices cleared at lower and uniform levels since there were no binding constraints in the flow of capacity between zones.
For the 2017-2018 planning year auction, which covers the period from June 1 to May 31, 2018, prices in all zones cleared at $1.50/MW-day, sinking 93% in Zone 1 and nearly 98% in Zones 2-7 on the year.
The softer results in this year's MISO auction, which were released after the close of business April 13, were attributed to lower load forecasts in the north and central MISO regions, as well as the addition of new supply. According to Doying, supply increased 450 MW on the year, while demand fell 730 MW on the year.
Including almost 135,000 MW of planning resources to meet forecasted demand and necessary reserves, cleared offers in this year's MISO auction were comprised of increased demand resources and energy efficiency, as well as increases in renewables such as wind and solar.
Most analysts had projected softer prices in the 2017-2018 auction, but ranging anywhere from $10/MW-day to $20/MW-day for unconstrained regions and possibly breaking higher for constrained zones, such as Zones 4 (Illinois) and 7 (Michigan).
In the 2016-2017 auction, retirements and capacity exports contributed to higher clearing prices in several zones. In that auction, Zone 1 cleared at $19.72/MW-day, Zones 2-7 cleared at $72.00/MW-day and Zones 8-10 cleared at $2.99/MW-day.
The voluntary auction is part of MISO's resource adequacy process, which also allows participants to self-supply to meet the required reserve margin. The annual auction sets the price paid to power plant owners that agree to have their generators available when called upon at peak times. MISO's resource adequacy construct combines regional and local criteria to achieve a least-cost solution for the region as a whole and ensure each local zone has sufficient resources within their boundaries to meet their own needs.
MISO said in an April 13 news release that it will continue to focus on the importance of securing long-term resource adequacy as the industry and generating fleet continues to change.
"Industry forces continue to indicate significant shifts in the fleet," Doying said in the April 13 news release. "ISO will continue to address seasonal and locational issues with our stakeholders while ensuring that market signals provide incentives for investment where and when they are needed."
MISO continues to support individual state processes around resource adequacy planning. In Illinois, MISO is formulating approaches to work with policymakers on developing a state-based approach to fully address long-term resource adequacy requirements.
More detailed auction results will be made available May 10, MISO officials indicated.
For more detailed capacity market data, visit our Capacity Market Pages.