OREANDA-NEWS. Generating resources in Illinois are the biggest winners in the Midcontinent Independent System Operator's (MISO) annual capacity auction for the year beginning in June.

Resources in zone 4, which covers much of Illinois but excludes the Chicago metropolitan area that forms part of PJM, cleared the auction at \$150/MW per day in the June 2015 – May 2016 period, up from \$16.75/MW per day a year earlier - the highest price in last year's auction.

Generating resources in Illinois are facing depressed energy prices as a result of overbuilt wind resources and low natural gas prices. A spike in MISO capacity prices, even for a year, will be welcome news to companies like Dynegy and Exelon that own large generating assets in the state.

The high clearing price set in Illinois' zone 4 was the result of MISO's requirement that each zone meet a reliability requirement with local resources to avoid shedding load more than one day every 10 years, the grid operator said.

The rest of the coal-dominated MISO region cleared below \$4/MW per day in the grid operator's third planning resource auction for capacity that concluded yesterday.

Capacity in zones 2, 3, 5, 6 and 7 cleared at \$3.48/MW per day, down from \$16.75/MW per day last year for the bulk of MISO's north and central region that covers eastern Wisconsin, Michigan, Iowa, Missouri, Indiana and Kentucky.

Zone 1, covering Minnesota, North Dakota and western Wisconsin, also cleared at \$3.48/MW per day, little changed from the \$3.29/MW per day in last year's auction.

Zones 8 and 9, MISO's south region covering Arkansas, Louisiana, Texas and Mississippi, cleared at the lowest price, \$3.29/MW per day, down from \$16.44/MW per day last year because of constraints that limit power transfers between MISO north and south at 1,000MW.

Overall, the auction which ended on 31 March secured 136,359MW of capacity to meet forecast demand and a reserve margin for MISO's 2015-16 planning period. More than 145,800MW were offered into the auction, leaving the region with a 7pc supply surplus.

Cleared resources include 122,965MW of on-grid generation, 3,986MW of behind-the-meter generation, 5,938MW of demand resources and 3,469MW of external resources.

MISO said the drop in clearing prices across the region, with the exception of zone 4, resulted from increased self-supply through fixed resource adequacy plans that "in general lowered offers by market participants."

The auction ensures that the MISO region will have adequate generation to meet demand and reserves at the lowest possible cost, MISO executive vice president of operations Richard Doying said.

"The planning resource auction is one of several important tools to provide greater certainty and transparency to stakeholders across the region. This is vital given the challenges we face with potential capacity shortfalls starting in the 2016-2017 planning year," Doying said.