Nov. 27, 2017  – RTO Insider – ICC to Hold Workshops on Future of Zone 4

Dynegy’s most recent bid to develop a specialized capacity market for downstate Illinois has failed to gain traction in the state’s legislature, but the conversation around the region’s resource adequacy is far from over.

The legislation (SB 2250/HB 4141), which would have created a separate competitive capacity auction for central and southern Illinois administered by the Illinois Power Agency, failed to advance after hearings this month.

Dynegy last month characterized the competitive auction as “subsidy-free” and “fuel-neutral.” It was expected to translate into higher clearing prices….

MISO this year maintained there is no reliability issue Zone 4, predicting a 0.7-GW capacity surplus in the region in 2018, up from the 1.6-GW shortfall the grid operator predicted for 2018 in its 2016 resource adequacy survey produced in cooperation with the Organization of MISO States. (See Capacity Survey Shows MISO in the Black.)

“MISO’s recent 2017 OMS-MISO survey results suggest that Zone 4 capacity requirements will continue to be met through 2022. Planned transmission and generation provide additional reason for optimism in this regard,” the Illinois Commerce Commission wrote earlier this month in a white paper requested by Gov. Bruce Rauner as a response to MISO’s appeal for a resource adequacy plan.

The commission’s report said the state has four options to address resource adequacy in central and southern Illinois: continue to rely on existing competitive forces and market structures; impose additional capacity requirements on load-serving entities; create a reliability portfolio standard; or encourage or require utilities to switch RTOs. Dynegy last year proposed legislation that would transition the entire state into PJM’s markets. (See Dynegy Introduces Bill to Move All of Ill. Into PJM.)