Illinois AG will investigate controversial MISO capacity auction

Dive Brief:

The Illinois attorney general will examine the results of a MISO capacity auction held this month, after expressing concern for the substantial increases some utilities will see associated with the higher capacity costs.
Ameren Illinois customers in the Central and Southern regions could see significant price increases beginning June 1, according to the Citizens Utility Board (CUB), following a capacity auction overseen by the Midcontinent Independent System Operator. According to the St. Louis Post-Dispatch, capacity prices in Illinois rose to $150/MWd (megawatt day), from $16.75/MWd, following the auction.
While Ameren will not profit from the increases, CUB said power generators such as Exelon and Dynegy do stand to make millions from their power plants as a result of the auction despite a surplus of electricity in the state.

Dive Insight:

Attorney General Lisa Madigan believes the capacity costs could mean hundreds of millions in additional revenues for the companies for Exelon and Dynegy, according to the St. Louis Post-Dispatch, but a Dynegy spokesperson told the newspaper those figures were "not true."

“The total we make from the auction was roughly $30 million, not $284 million or some of the numbers that have been thrown out there,” Dynegy spokesman Micah Hirschfield told the Post-Dispatch.

The Citizens Utility Board is protesting the results of the auction and wants FERC to investigate.

"Illinois has a surplus of electricity, so the fact that Ameren customers might have to pay skyrocketing power rates on June 1 raises serious questions," CUB Executive Director David Kolata said in a statement. "This is another sign that the electricity market is not working for Illinois consumers, and we need to get to the bottom of it."

While neither Dynegy nor Exelon have said they set the high capacity price in the auction, a spokesperson for MISO told the newspaper the issue "is not a resource adequacy issue."

Critics say Exelon has a history of gaming capacity market auctions, which the utility rejects.