Dive Brief:

• Capacity prices for the upcoming summer season jumped to $666.50/MW-day from $30/MW-day last year across the Midcontinent Independent System Operator’s footprint — driven in part by declining surplus capacity, according to the results of its latest planning resource auction released Monday.
• Surplus capacity in the summer fell to about 2.6 GW from 4.6 GW last year, with 5.1 GW of new capacity and 1.2 GW in increased accreditation more than offset by 4.9 GW in reduced accreditation, 3.3 GW in power plant suspensions and retirements and 900 MW in reduced imports, MISO said. 
• On an annual basis, capacity prices cleared at $217/MW-day for MISO’s northern and central region and at $212/MW-day for its southern region. “The results reinforce the need to increase capacity, as demand is expected to grow with new large load additions,” MISO said.

Dive Insight:

For the first time, MISO used a “reliability-based demand curve,” which the grid operator said introduces a reliability-focused pricing structure that more accurately reflects the increasing value of accredited capacity as the system approaches minimum resource adequacy targets.

“MISO's market reforms continue to assist in providing pricing signals that improve market efficiency and enhance reliability across the footprint,” Aubrey Johnson, MISO’s vice president of system planning and competitive transmission, said in a press release.

MISO operates the grid and wholesale power markets across 15 states from Louisiana to Minnesota and in the Canadian province of Manitoba.

Most load-serving entities in MISO supply their own capacity or secure it before the auction, the grid operator noted. LSEs without enough capacity to meet their resource adequacy requirements will pay the auction clearing prices for their capacity shortfall.

The auction results leave MISO’s northern and central regions with a 10.1% reserve margin for the summer and its southern region with an 8.7% margin for the same period, the grid operator said. 

Capacity for the fall season cleared at $91.60/MW-day in the northern and central region and at $74.09/MW-day in the south compared to $15/MW-day in all zones except in Missouri, which cleared at $719.81/MW-day a year ago. 

Winter season clearing prices jumped to $33.20/MW-day in all zones, up from 75 cents/MW-day last year. Spring season capacity prices cleared at $69.88/MW-day in all zones compared to $34.10/MW-day in all zones except in Missouri, which cleared at $719.81/MW-day a year ago. 

About 9.1 GW of solar and 6 GW of wind cleared the auction, up from 4.9 GW and 5.2 GW, respectively, a year ago, according to MISO. 

About 4.3 GW of behind-the-meter generation cleared for the summer season, up from 4.1 GW a year ago, and 9 GW of demand response resources cleared, up from 8.1 GW in 2024. 

“MISO, our states and our stakeholders continue to make progress responding to the resource adequacy challenges we face, and these results offer valuable insights to allow members to maximize their existing resources and plan for the ongoing energy transition,” Johnson said.