1

Update - RTOs and Capacity

January 28, 2015

2

Purpose of Presentation

• Update the Commission on issues related to – (1) Ameren Missouri – potential Local Resource

Zone combination– (2) Recent SPP Actions related to proposed Clean

Power Plan / 111(d) rules• Not seeking direction at this time

3

What is Capacity?

• Capacity is analogous to “Owning a Car” but not using it– The ability of a generator to produce energy /

carry passengers in the car– Megawatts of a power plant

• Energy is analogous to “Driving the Car”– The generator actually producing energy / actually

carrying passengers in the car– Megawatt / hours of energy produced

4

RTOs and Capacity

• MISO and the Southwest Power Pool (SPP) both check annually whether utilities have enough capacity over the next year to “keep the lights on”

5

111(d) and capacity

• The proposed 111(d) / Clean Power Plan rules have the RTOs wanting to ensure there is sufficient capacity in their footprints

• In the past few years, both MISO and SPP have had sufficient capacity

• If 111(d) goes into effect, both MISO and SPP expect to see reductions in their generation fleet; hence they expect reductions in capacity

6

MISO Capacity

• MISO has a voluntary capacity market – Annually, utilities state how much capacity they

need, and generators sell capacity– Utilities can “opt out” of the market if they have

sufficient “deliverable” capacity• Recently, MISO has held stakeholder discussions

about changing their capacity market• One important discussion is the “Local Resource

Zone” configuration.

7

Local Resource Zones

• Ameren Missouri’s current Local Resource Zone only includes Missouri territory.

• Ameren Missouri owns or has an ownership interest in generation resources in other states, such as Illinois

• MISO’s capacity market only counts resources within the same Local Resource Zone when it calculates available capacity for that zone– Utilities can use capacity from other zones if there is

sufficient transmission, plus other factors

8

Current MISO Local Resource Zones

Missouri and Illinois are currently two separate zones

9

Analysis at MISO

• MISO is having stakeholder discussions about two Local Resource Zone issues– Combining existing Local Resource Zones, such as

combining Zones 4 (IL) and Zone 5 (MO)• Ameren Missouri has requested this study and favors

this action (see attached Ameren MO Comments)

– Separating existing Zones, such as separating Mississippi from existing Zone 9• The Mississippi Commission has requested this study

10

Stakeholder Discussion

• The main opposition against MISO combining Zone 4 (IL) and Zone 5 (MO) has come from Independent Power Producers (non utility companies that own generation)

• Generally, those companies make more money when the price of capacity is higher

• At least one of the Independent Power Producers owns generation in Illinois

11

Ameren Missouri and the MISO Capacity Market

• In previous capacity auctions, Ameren Missouri has bought capacity from itself– Able to “opt out” of the capacity market

• Combining MO and IL into one Local Resource Zone would help ensure Ameren Missouri could continue to use its own resources in future capacity auctions

12

13

SPP Capacity

• SPP accepts reports from utilities• SPP is currently reevaluating how they look at

capacity• MoPSC Staff is participating on the SPP

working group that is reevaluating SPP capacity policies

14

SPP Capacity Margin Task Force

• The SPP CMTF is evaluating how to count resource capacity using different fuels and generator availability under 111(d)

• Once the CMTF determines how much capacity is likely to be available under 111(d), it will recommend a new capacity planning margin to the SPP Board of Directors

• SPP has explicitly stated they will not interfere with state authority to determine capacity margins and resource types (that is, wind, solar, coal, gas)

15

SPP Capacity Margin Task Force

• Also discussing “enforcement policies” – penalties for not planning ahead for sufficient capacity

• At this time, not certain how far ahead in time the planning would be (One year? More?)

16

SPP Strategic Planning Committee• The SPP SPC is guiding SPP’s effort to plan for 111(d) impacts

against coal burning electric generators• SPP Staff has begun to seek guidance and input information from

its members as it seeks to model coal generator retirements and fuel conversions, and new compliant additions to the generator fleet to comply with the EPA’s Clean Power Plan

• SPC is also monitoring SPP Staff’s response to FERC’s inquiry into utility fuel availability during extreme weather events to ensure resources run when called upon to run– SPP will participate at a FERC sponsored technical conference in

Washington, D.C. – SPP will also participate in a FERC sponsored regional technical

conference in St. Louis on March 31, 2014

17

SPP Strategic Planning Committee

• SPP’s modelling effort is producing a “transmission solution” if 111(d) goes into effect– Goal – ensure reliability / “keep the lights on”

18

Questions?