Are old Midwest coal plants pushing renewables offline?
Midwest regulators are probing whether a little-known practice is slowing the region’s accelerating pivot away from coal toward renewables and gas.
Utility commissions in Minnesota and Missouri are looking at the way companies run older coal plants, even when those units aren’t the cheapest option — and whether that’s squeezing out lower-carbon resources and raising costs for consumers.
The Minnesota Public Utilities Commission asked the state’s investor-owned utilities for data earlier this year on the practice of “self-committing” and “self-scheduling” generating units in the Midcontinent Independent System Operator (MISO) grid.
Similarly, the Public Service Commission in Missouri, which includes parts of MISO and the Southwest Power Pool (SPP), unanimously voted to open a similar case last week after Commissioner Daniel Hall asked whether the practice is benefiting the state’s ratepayers.
Hall said the issue is worth a close look, noting that MISO and SPP — as allowed under existing tariffs — have 78% and 31% of their energy self-committed, respectively.
“From what I understand, that is squeezing out some, perhaps, lower-cost generation, particularly gas in the short run, but possibly renewables in the long run,” Hall said.
Regional transmission operators such as MISO and SPP are tasked with keeping the lights on at the lowest cost, and they prefer to dispatch the cheapest generating units before running more costly ones.
But under grid operator tariffs, utilities can ensure generating units run at a designated output level even with less costly units available and accept the prevailing market price. In such cases, plants are price takers and accept the prevailing wholesale energy price.
The utility process of self-committing or self-scheduling power plants to run even when there’s cheaper energy available on the grid is a complex issue and opaque to outsiders. Increasingly, there are questions about whether it’s slowing a transition to cleaner energy amid inexpensive shale gas and falling costs for renewable energy.
For Joseph Daniel, a senior energy analyst at the Union of Concerned Scientists, there’s little doubt.
Daniel has analyzed the coal fleet throughout MISO, SPP, the PJM Interconnection and the Electric Reliability Council of Texas. About half of it, or 100 gigawatts, ran more than expected based on economics.
