Return to Blog

Market Monitor – Midwest ISO Capacity Costs Rise, Likely To Remain High Beyond 2023

The Midwest Independent System Operator (MISO), who coordinates the electricity grid for many states, including Illinois and Michigan, has announced a sharp increase in capacity costs starting in June of 2022.

MISO recently conducted its annual auction to secure capacity resources to meet electricity demand requirements across its system for the June 2022 – May 2023 period. Prices starting in June are up significantly compared to current levels.

Generation retirements, especially of coal units, and projected increases in demand in the coming year combined to push most regions into a situation where there is not expected to be enough generation during extremely high demand periods and that forced load shedding may be needed.

The table below shows the prices in the most recent auction, with Michigan (zone 7) and southern Illinois (zone 4) both clearing at $236/MW-Day, nearly 50 times higher than the current price of $5/MW-Day.

Unless sizable new generation is built in many of these regions in the next 12 months, Tradition anticipates capacity prices in MISO to remain elevated beyond 2023.

Source:  MISO

This document is the property of, and is proprietary to, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) and is identified as “Confidential.” Those parties to whom it is distributed shall exercise the same degree of custody and care afforded their own such information. TFS makes no claims concerning the validity of the information provided herein and will not be held liable for any use of this information. The information provided herein may be displayed and printed for your internal use only and may not be reproduced, retransmitted, distributed, disseminated, sold, published, broadcast or circulated to anyone without the express written consent of TFS. Copyright © 2022 TFS Energy Solutions, LLC d/b/a Tradition Energy. Although the information contained herein is from sources believed to be reliable, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) makes no warranty or representation that such information is correct and is not responsible for errors, omissions or misstatements of any kind. All information is provided “AS IS” and on an “AS AVAILABLE” basis, and TFS disclaims all express and implied warranties related to such information and does not guarantee the accuracy, timeliness, completeness, performance, or fitness for a particular purpose of any of the information. The information contained herein, including any pricing, is for informational purposes only, can be changed at any time, should be independently evaluated, and is not a binding offer to provide electricity, natural gas and/or any related services. The parties agree that TFS’s sole function with respect to any transaction relating to this document is the introduction of the parties and that each party is responsible for evaluating the merits of the transaction and the creditworthiness of the other. TFS assumes no responsibility for the performance of any transaction or the financial condition of any party. TFS accepts no liability for any direct, indirect, or other consequential loss arising out of any use of the information contained herein or any inaccuracy, error, or omission in any of its content.