J.Pollock Blog

Resource Adequacy and Reliability

This should be yet another wake-up call that the more rapid retirement of generation capacity is placing pressure on system operators’ ability to keep the lights on, particularly during more stressful periods.  

MISO is not the only region facing an imminent threat.  

MISO facing increasingly thin reserve margins due to plant retirements – NERC EXTRA

Thursday, December 15, 2022 3:24 PM CT

By  Siri Hedreen
Market Intelligence

The 469-MW, coal-fired Michigan City plant in Indiana, above, is slated to be shut down in 2028. Pending retirements are putting the Midcontinent ISO at increased risk of an electricity shortfall as soon as next year, the North American Electric Reliability Corp. warned.
Source: Northern Indiana Public Service Co.

The Midcontinent ISO could see an energy shortfall as soon as summer 2023 if nuclear, coal and gas-fired plants in the region are retired faster than new generation resources can replace them, according to a grid watchdog.

The North American Electric Reliability Corp., or NERC, warned in its latest 10-year reliability assessment released Dec. 15 that MISO is operating on increasingly thin reserve margins and risks a 1,300-MW capacity deficit during its next peak season.

The potential deficit for 2023 “continues an accelerating trend” of thinner reserve margins for MISO, the report noted. The deficit is also expected to hit one year earlier than previously projected by NERC.

Though most other regions are expected to be able to meet electricity demand over the next 10 years, NERC renewed warnings that the Canadian province of Ontario and parts of California and northwest Mexico are at “high risk” for power outages.

In Ontario, generation retirements and scheduled nuclear plant refurbishments are expected to result in a 1,700-MW capacity deficit in 2025, according to NERC. And while California is adding capacity, “energy risks persist” in the summertime and around sunset, the report said.

More impacts from extreme weather

“When we look at events over the last several years, it’s clear that the bulk power system is impacted by extreme weather more than it ever has,” John Moura, NERC’s director of reliability assessments and performance analysis, said in a Dec. 15 press briefing.

Climate change is putting increasing stress on the bulk power supply, driving electricity demand and forcing generation resources offline, the report said. Even in areas that meet NERC’s minimum capacity requirements, “long-duration weather events increase the risk of electricity supply shortfalls,” the report warned in bolded text.

Aside from the regions already at high risk, “elevated risk” regions include New England and nearly everywhere west of the Mississippi River, according to the report. NERC cited extreme summer temperatures in the U.S. West and extreme winter weather in Texas as weather events that could pose a risk to the regions’ bulk power systems.

Meanwhile, criminal attacks like the one on two substations that caused a widespread outage in North Carolina earlier in December could worsen NERC’s projections. Physical and cybersecurity risks to the grid are “not specifically addressed” in the report, the organization noted.

However, newer developments, including unconfirmed capacity additions, could improve the “conservative by design” reliability outlook. NERC officials said the report does not account for the continued operation of California’s Diablo Canyon nuclear plant, which won federal funding that could push back its planned retirement date.


NERC in the report urged policymakers and operators to factor the demand-driving trends of climate change into their grid planning. In addition to prolonged weather events, trends to mitigate global warming — like the greater use of electric vehicles and heat pumps — are putting more demand on the power grid.

But the assessment also urged policymakers “use their full suite of tools” to regulate plant retirements, many of which are driven by clean energy commitments. More than 88 GW of fossil and nuclear generation are slated to retire over the next 10 years, according to NERC.

“Just to say it for the fourth and fifth time, managing the pace of our generation retirements and our resources, to make changes to ensure we have enough energy and essential services, [is] an absolute necessity,” Moura said.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.