MISO Demand Response Programs (Midcontinent)

The Midcontinent Independent System Operator (MISO) manages the grid and wholesale markets across a large footprint covering 15 U.S. states (Midwest and South) and Manitoba, Canada. MISO includes areas with full retail competition (like Illinois), partial competition, and traditionally regulated states.

Demand Response participation in MISO is heavily influenced by state regulations and often occurs through utility-run programs or direct participation by large industrial customers. Third-party aggregation faces restrictions in some MISO states due to state opt-outs under FERC Order 719 (some aspects preserved under Order 2222).

Key MISO DR Categories & Programs for C&I

Load Modifying Resource (LMR)

Administered By: MISO (Resources typically registered by Utilities or Aggregators/ARCs where allowed)
Type: Capacity/Emergency (Resource Adequacy)
Goal: Provide load reduction capability during MISO-declared emergencies (Maximum Generation Events) to meet capacity requirements. LMRs are generally *not* dispatched economically in the energy market.
Participation: Demand-side resources (interruptible load, behind-the-meter generation) enrolled, often via utility interruptible tariffs or standby rates. Aggregation possible (≥100 kW typical minimum).
Response: Varies by type. LMR Type I allows long notice (up to 6 hours); LMR Type II requires faster response (≤ 30 minutes to 1 hour). Participants choose their type/notification time. Events are rare (0-3/year historically) but resources must be available (~16 calls/year potential).
Baseline: Often based on Firm Service Level (FSL) or a calculated profile based on past peaks, defined by the utility or registering entity.
Stackability: An LMR generally cannot participate as an energy market resource (like a DRR) at the same time for the same MW. It's primarily a capacity commitment.
Incentives: Earns capacity value determined by MISO's seasonal Planning Resource Auction (PRA). PRA prices are notoriously volatile, swinging from very high (e.g., ~$86/kW-year in 2022-23 due to shortages) to very low (e.g., ~$1-5/kW-year in 2023-24) depending on supply/demand balance in each zone. Some utilities offer fixed bill credits to shield customers from this volatility.
Penalties: Failure to curtail when called can result in reduced capacity credit and potential capacity shortfall charges for the sponsoring Load Serving Entity (LSE), potentially passed back to the customer or aggregator.

Demand Response Resource (DRR) - Type I & II

Administered By: MISO (via Utilities or Aggregators/ARCs where allowed)
Type: Economic (Energy & Operating Reserve Market Participation)
Goal: Allow demand resources to participate economically in MISO's energy and operating reserve markets, similar to generators.
Participation: C&I loads or aggregations (often ≥1 MW) bidding into day-ahead/real-time markets.
- DRR-Type I: Provides a fixed (on/off) load reduction amount when dispatched.
- DRR-Type II: Provides a variable load reduction, responding dynamically to dispatch signals (more flexible but requires advanced controls).
Response: Based on market clearing and dispatch signals (e.g., 5-30 minutes). DRR-II can provide faster responses for reserves.
Baseline: Established via telemetry and baseline load models for calculating the curtailed amount. 5-minute settlement common.
Stackability: Can potentially also register as LMR for capacity value, but must meet obligations of both. Often resources choose one primary path.
Requirements: Requires telemetry, integration with MISO market systems. Participation by independent aggregators is limited by state regulations ("Order 719 opt-outs"). Illinois is a notable exception where aggregation is more feasible.
Incentives: Paid the Locational Marginal Price (LMP) for MWh curtailed in the energy market. If providing operating reserves, earns market clearing price for that service. No separate capacity payment unless also registered as an LMR.
Penalties: Market-based penalties for failure to follow dispatch instructions.

Utility Interruptible/Curtailable Programs

Administered By: Local Utilities within MISO footprint
Type: Often function as LMRs for MISO capacity, or utility-specific peak shaving/emergency programs.
Participation: C&I customers enroll directly with their utility under specific tariffs (e.g., "Industrial Interruptible Service," "Controlled Air Conditioning," "Standby Rates").
Compensation: Typically fixed bill credits ($/kW-month or $/kW-year) or lower demand charges, set in utility rate cases rather than directly tied to volatile MISO PRA prices. Range varies widely (e.g., $20-60/kW-year, sometimes higher via specific contracts like Ameren IL's past $40/kW-yr program).
Stackability: Usually exclusive – the utility controls the interruptible load. Customers generally cannot sell the same load reduction to a third-party aggregator unless specific rules allow (e.g., for excess flexibility).
Penalties: Failure to curtail when called by the utility often results in loss of bill credits for the year or significant financial penalties defined in the tariff.

Operating Reserves (Spinning/Regulation via DR)

MISO allows DR (typically DRR-Type II or aggregated behind-the-meter resources) to provide spinning reserves or regulation if they meet technical requirements (telemetry, fast response).
In practice, participation by pure load resources is less common than in other RTOs, partly due to state restrictions and technical hurdles. Aggregated batteries or generation at C&I sites are more likely participants.

The MISO market presents unique challenges and opportunities due to the mix of regulatory environments and the high volatility of its capacity market (PRA). Understanding both MISO market rules and state-specific regulations (especially regarding third-party aggregation) is crucial for C&I customers.

Disclaimer: MISO PRA prices are extremely volatile. Utility program details vary significantly by state and utility. Always consult official MISO documentation, state regulations, and your specific utility/aggregator for current details.