Dive Brief:
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Big River Steel will pay nearly $22 million to settle charges it failed to change its mill operations when the Midcontinent Independent System Operator accepted its demand response offers under an agreement approved last week by federal regulators.
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Big River Steel, which owns a steel mill in Osceola, Arkansas, with 300-MW of peak load, agreed to return $15.9 million in demand response payments and pay a $6 million fine, according to the Aug. 21 decision by the Federal Energy Regulatory Commission.
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Entergy Arkansas, which served as the market participant for the mill, agreed to disgorge $5 million it received and return $8.2 million to its customers via a bill credit.
Dive Insight:
The Big River Steel mill operates as a demand response resource in MISO’s day-ahead and real-time energy markets, according to FERC’s decision. While Entergy Arkansas served as the market participant for the mill, Big River Steel was responsible for following MISO’s instructions. For its role, the utility received a 10% administrative fee and a charge for energy not consumed at the mill, FERC said in its decision.
Except for a seven-day period during Winter Storm Uri in February 2021, Big River Steel did not change the mill’s energy use when MISO accepted its demand response offers between September 2016 and April 2022, according to FERC.
To cover the amounts paid out by MISO for Big River Steel’s demand response participation, the grid operator assessed charges totaling nearly $21 million to load serving entities: Entergy Arkansas in Arkansas; other Entergy utilities in Louisiana, Mississippi and Texas; and non-Entergy load-serving entities, FERC said.
Entergy Arkansas customers paid 63% of the total, followed by non-Entergy load-serving entities at 28.3% and other Entergy affiliates at 8.7%, according to the decision.
FERC’s enforcement office said that because Entergy Arkansas was the market participant for Big River Steel, the utility was responsible for the steel company’s conduct.
Big River Steel and Entergy Arkansas fully cooperated with the enforcement office investigation, a factor the commission considered when setting the penalty, according to the decision.
MISO had almost 12,200 MW of demand response resources, or 10.2% of its peak load, in its markets in 2021 — making it the leader among regional transmission organizations and independent system operators, according to FERC’s most recent demand response report.
MISO operates the grid and wholesale power markets across 15 central U.S. states and in Manitoba, Canada.
