Dive Brief:

• Capacity prices for the upcoming summer and spring seasons roughly tripled to $30/MW-day and $34.10/MW-day, respectively, across nearly all of the Midcontinent Independent System Operator’s footprint — driven in part by declining surplus capacity, according to the results of its latest planning resource auction, or PRA, released Thursday.

• However, prices for MISO zone 5 — served by Ameren Missouri and Columbia, Missouri’s municipal utility — jumped to $719.81/MW-day for the upcoming fall and spring seasons from $15/MW-day and $10/MW-day, respectively, in the previous auction. The increase in pricing to the “cost of new entry” was triggered by power plant retirements and planned power plant maintenance that led to expected supply shortfalls, according to MISO.

• “This year’s results amplify the need and urgency for MISO’s efforts around resource availability and market redefinition as outlined in the Reliability Imperative,” Clair Moeller, MISO’s president and chief operating officer, said in a press release. “We will continue working with our member utilities and states to hone regional planning processes and market mechanisms to meet the needs of our evolving fleet.”

Dive Insight:

The 2024-2025 PRA marks the second year MISO has used its seasonal capacity framework, which aims to more accurately assess the grid operator’s capacity needs during the year compared to its previous practice of pegging the auction to just its summertime requirements. MISO’s capacity year starts June 1 with the summer season.

Overall, surplus summertime capacity in MISO fell 29% to 4,624 MW from 6,482 MW last year, partly reflecting power plant retirements and reduced offers from outside MISO, according to the grid operator. The surplus fell 40% in its northern and central regions to 2,881 MW.

In the north and central regions, 2,538 MW of new supply was offered in the latest auction while 1,820 MW, mostly coal, retired, MISO said.

The capacity surplus in MISO’s southern region — which includes parts of Arkansas, Louisiana, Mississippi and Texas — held roughly flat at 1,744 MW.

In MISO’s footprint in Missouri, the local clearing requirement increased because of higher electric demand and a tighter limit on imports, leaving an 872 MW expected shortfall in the fall, MISO said.

Capacity prices in the winter fell to 75 cents/MW-day in all of MISO’s zones from $2/MW-day for all zones last year, except zone 9, which cleared at $18.88/MW-day last year. Prices in the fall, outside Missouri, were flat at $15/MW-day.

Load-serving entities that entered MISO’s auction without enough capacity to meet their resource adequacy requirements will pay the auction clearing prices for their capacity shortfall, the grid operator said.

“Decreasing capacity surplus and the zonal deficiency, coupled with emerging risks due to fleet transition and new load additions, reinforce the urgency for ongoing reforms,” MISO said.

The grid operator said proposals under review by the Federal Energy Regulatory Commission to adopt a sloped demand curve and revise its capacity accreditation process should bolster resource adequacy.