MISO warns of potential capacity shortfall this summer

The Midcontinent Independent System Operator (MISO) is heading into the summer cooling season with insufficient firm generation that could result in a shortfall of capacity during periods of peak load.

MISO said last week that it is working with member companies "to prepare for the worst-case scenarios" as higher-than-normal temperatures are forecast throughout the grid's footprint this summer.

The grid operator expects its load to peak at 124GW this summer and to have no more than 119GW of regularly available generation. The need for controlled power shutoffs may depend on the availability of non-firm resources like imported power and wind generation, MISO said.

"We closely monitor the many challenges the summer season can bring and coordinate with our members and other grid operators for situational awareness," said MISO's executive director of system operations Jessica Lucas.

The grid expects electricity demand to peak in July, according to slides accompanying presentations given last week.

Presenters pointed to weather forecasts from Maxar and the National Oceanic and Atmospheric Administration that projected above-normal temperatures in at least some of MISO's footprint in June, July and August. MISO staff had used NOAA's projection from 17 March. A later projection from NOAA suggests temperatures in the upper Midwest and northern Plains have equal chances of being normal or above- or below-normal, while the southern portion of MISO's footprint will be warmer-than-average.

MISO's assessment aligns with the results of the grid operator's 2022-23 planning resource auction, which indicated an electricity generation capacity shortfall for the north and central regions, which encompass parts of 11 states in the Midwest.

US utilities are struggling to build up coal stockpiles ahead of summer as rail service remains challenged in some regions. The US Energy Information Administration (EIA) has projected that it could take most of this year or longer before coal producers and railroads are able to ship enough coal for utilities to have "comfortable" inventory levels, Tim Crowley, executive vice president at LE Peabody & Associates, told MISO last week.

About 79pc of MISO's coal shipments were delivered by rail in 2020, according to EIA. Last year, 52 MISO coal plants received more than 99mn short tons (90mn metric tonnes) of coal via rail.

This summer rail coal shipments to MISO could be affected by "high natural gas prices driving up demand for coal, which results in coal inventories being depleted and railroads not being able to respond in a timely manner to address those low coal inventories," Crowley said. The direction of gas prices, power plant inventories and railroads longer-term efforts to diversify away from coal could also have an effect on shipments in coming years, he said.

By Elena Vasilyeva