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FERC approves MISO deal to keep city’s generation running for reliability purposes


March 18, 2013

By Robert Varela
Editorial Director
The Federal Energy Regulatory Commission has approved the Midwest Independent Transmission System Operator’s agreement with Escanaba, Mich., to continue operating two 12.5-MW generating units that the municipal utility had planned to mothball. The "system support resource" agreement with Escanaba is the first use by MISO of such contracts to forestall the retirement or mothballing of generation in order to prevent a violation of reliability standards.

The commission said MISO should use such agreements "only as a limited, last-resort measure," and ordered MISO to begin a stakeholder process to evaluate alternatives before the agreement between MISO and Escanaba expires on June 14. 

The city is selling the two units to Escanaba Green Energy, LLC, which plans to convert them from coal-fired to biomass-fired generators. If they are successfully converted, the units will be able to be economically dispatched, thereby eliminating the need for the system support agreement, MISO said. An already-planned transmission system upgrade would alleviate the reliability concerns, but that upgrade is not expected to be in service until December 2016, MISO said.

Commissioner John Norris encouraged MISO "to thoroughly explore all of its options to maintain a reliable grid," including both transmission and non-transmission alternatives. "I challenge MISO and its stakeholders to think creatively in evaluating how to best respond to the reliability challenges presented by generator retirements in Escanaba, Mich., and elsewhere that will confront the region," Norris said in a concurring opinion. 

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