Midwest Power Capacity Cost Soars 47-Fold on Supply Shortfalls

(Bloomberg) -- Midwest consumers are facing higher electricity costs amid looming supply shortages that increased payouts to generators by 47-fold in an annual auction. 

The capacity price for generators serving 11 states in the region that are part of the Midcontinent Independent System Operator jumped to $236.66 a megawatt-day for the year starting June 1, the grid operator said in a statement late Thursday. The price was $5 a megawatt-day in the previous auction. 

Capacity for the southern part of MISO, including Arkansas, Louisiana, Mississippi and Texas, climbed to $2.88 per megawatt-day from 1 cent in last year’s auction. 

Households and businesses that rely on utilities and retailers who don’t own their own power generation or contract enough supplies will see the steepest increases, according to MISO. 

The reality is those areas that are short power supplies “will have increased risk of temporary, controlled outages to maintain system reliability,” Clair Moeller, MISO’s chief operating officer, said in the statement. 

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