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TIEC: Retail Choice At Entergy Texas Would Be Hindered By MISO Forward Capacity Market

November 14,2017

If the Midcontinent ISO ever adopted a centralized, forward capacity market for retail choice areas, "it would likely be necessary for the ETI [Entergy Texas] service area to leave MISO in order to implement retail competition," the Texas Industrial Energy Consumers said in comments to the Texas PUC concerning a review of costs and benefits of Entergy Texas' membership in MISO

"TIEC has serious concerns about MISO's approach to resource adequacy in competitive areas. As discussed below, MISO has taken positions before the Federal Energy Regulatory Commission (FERC) to support a forward capacity market proposal, the 'Competitive Retail Solution' (CRS), that is antithetical to the principles that guide Texas's competitive wholesale and retail markets. At a minimum, the Commission [PUCT] should continue to actively oppose these types of proposals and prevent them from impacting Texas, including preserving the State's right to oversee competitive market design, and retaining maximum flexibility to remove ETI from MISO if necessary to pursue retail competition," TIEC said

"As the Commission will likely recall, MISO filed a proposed tariff change at FERC late last year known as the 'Competitive Retail Solution.' The CRS proposed a mandatory forward capacity market for the few areas of MISO that are currently open to retail competition," TIEC noted

"Based on filings related to that docket and various conversations with MISO Staff, it appears that MISO generally does not share TIEC's views on the framework for a successful competitive market. In particular, at least some of MISO' s leadership appears to believe that a mandatory forward capacity construct is necessary to incentivize sufficient generation development without vertically integrated utilities. TIEC fundamentally disagrees with this premise. TIEC filed comments in the FERC proceeding to explain how a properly structured energy-only market can result in healthy reserve margins and generation development, using ERCOT as an example," TIEC said

"MISO's proposal was ultimately rejected by FERC after widespread opposition from stakeholders, as well as the Independent Market Monitor (IMM). However, TIEC remains concerned about the potential for a similar proposal in the future and the serious impediment this would pose to retail competition in the ETI service area. If a similar proposal ever gained traction, it would likely be necessary for the ETI service area to leave MISO in order to implement retail competition," TIEC said

"As a result, TIEC urges the Commission to (a) actively oppose these types of proposals, as it did in the CRS docket, (b) to ensure that all options remain open for imposing state-specific policies on resource adequacy, and (c) to retain flexibility for the ETI service area to leave MISO if necessary to facilitate retail competition in the future," TIEC said

TIEC also raised concerns on MISO's allocation of transmission costs to LSEs, stating that cost allocation does not appropriately follow benefits to load

MISO   Texas   Capacity Markets  

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