Area congressmen question energy regulator over rate spike

From Illinois Business Journal news services

WASHINGTON – Three Southwestern Illinois congressmen have sent a letter to the Federal Energy Regulatory Commission questioning this month’s Midcontinent Independent System Operator planning resource auction that resulted in significantly higher electricity capacity prices for central and southern Illinois.

The letter is from U.S. Reps. Rodney Davis, R-Taylorville, John Shimkus, R-Collinsville, and Mike Bost, R-Murphysboro. It was dated Friday.

The letter notes that capacity prices for MISO Zone 4, which includes the majority of Illinois, unexpectedly skyrocketed “from $16.75 per MW-day in 2014-2015, to $150 per MW-day for 2015-2016.

“Illinois families and businesses have a right to know that this auction was done properly and followed all the rules before being forced to pay higher utility bills,” said Davis. “Given the vast discrepancies from previous auctions, I want to make sure the proper review took place and I look forward to FERC’s response.”

“Not only is this a 900 percent increase from last year,” Shimkus said, “but this year’s capacity rate for our region is 40 times the price set for neighboring zones. Illinois ratepayers deserve to know whether all the rules for this auction were properly followed and, if so, what can be done to prevent similar rate spikes moving forward.”

“A rate increase of this magnitude is harmful to working families, small businesses and manufacturers in Southern Illinois, especially since it won’t apply to neighboring jurisdictions,” said Bost. “I look forward to the FERC’s response to this inquiry.”

The extent to which the capacity rate increase will affect individual ratepayers is not yet fully known. State officials have also questioned the auction in a separate letter to MISO.

Text of the letter is as follows:

Dear FERC,

Earlier this month the Midcontinent Independent System Operator (MISO) completed an annual planning resource auction that resulted in significantly higher capacity prices for central and southern Illinois. Specifically, this year’s capacity prices for MISO Zone 4 jumped, from $16.75 per MW-day in 2014-2015, to $150 per MW-day for 2015-2016. Not only is $150 per MW-day a 900 percent increase from the previous year, but this year’s capacity rate for Zone 4 is also more 40 times the rate in each of MISO’s eight other zones.

Given this vast discrepancy from year-to-year and zone-to-zone, I am writing to inquire as to whether any review or investigation has determined if the rules of the planning resource auction were properly followed. Additionally, if the rules were followed, will FERC consider changes to the market rules to prevent similarly unanticipated rate spikes moving forward?

Thank you for your time and attention to this matter. I look forward to your timely response.

Leave a Comment