MISO Discloses $280M Error, Over-procurement in 2025/26 Capacity Auction

AI generated summary

MISO has disclosed a significant software error that led to an over-procurement of capacity in its 2025/26 Planning Resource Auction, resulting in an estimated financial impact of $280 million on market participants. The error, which had been undetected since 2017, was traced back to a third-party vendor's coding that incorrectly calculated the loss of load expectation (LOLE) using an 'all-hours' methodology instead of the tariff-defined 'daily peak hour' method. This miscalculation caused higher auction clearing prices and reserve margin requirements, affecting auctions dating back to the 2018/19 planning year.

In response to the error, MISO plans to transition to the all-hours LOLE methodology starting with the 2026/27 planning year, pending approval from FERC. While MISO will not retroactively adjust the clearing prices for the 2025/26 auction, it will issue settlement adjustments to affected market participants. MISO has also committed to enhancing its software validation and testing processes to prevent similar issues in the future, and it is currently notifying generation companies about the financial implications of the error.