Editor’s note: Hate to say we saw it coming, but…
Midcontinent Independent System Operator (MISO) 2025 capacity prices are higher than historical prices because this is the first year adopting a Reliability Based Demand Curve (RBDC). MISO moved to RBDC instead of a vertical demand curve to reflect accurate price signals, and its market monitor has been calling for an RBDC construct for the past few years.
MISO cleared $660.50 per megawatt (MW)-day for all Local Resource Zones in the summer season. In the fall season, prices were split between the North and South regions. The north region cleared at $91.60 per MW-day, and the south at $74.09 per MW-day. In the winter season, all zones cleared at $33.2 per MW-day, and in spring, the price was $69.88 per MW-day.
In the last auction, the summer prices were $30 per MW-day across all zones. Only the Missouri zone 5 had seen a price jump of $720 per MW-day in the spring and fall seasons.
Solar had a big year, but its future is uncertain
For the renewables industry, especially the solar industry, this was a banner year, at least from the MISO capacity auction perspective. 9,100 MW of solar capacity cleared in this auction in the summer season, an 88% jump from last year’s auction. Last year, only 4,900 MW of solar capacity cleared. The capacity credit for solar is 50% in all 3 seasons except for winter, which gets only a 5% credit. Wind had a 17% jump in cleared MWs compared to the previous year. In this auction, wind cleared at 6,000 MW compared to last year’s 5,200 MW. Wind received 20.8% capacity credit for the summer of 2025 compared to the 18% credit the previous summer.
It remains to be seen if solar increases in next year’s auction. The Trump administration has ordered some coal plants to stay open, including in the MISO region. If a coal plant is mandated to run as a “must-run” unit, then, with existing transmission, renewable projects like wind and solar will be curtailed. Emergency curtailments of renewable energy to accommodate coal could increase at MISO because some of the transmission projects in the Tranche 1 portfolio approved by the MISO Board in June 2022 won’t be operational until June 2028. The entire Tranche 1 portfolio is scheduled to be operational in June 2030.
Higher prices in MISO were expected following last year’s debacle in PJM territory. Read more about the issues behind the regional transmission operator’s recent resource auctions on Factor This.
Auction shows the need for more Demand Response
The 2025 auction showed a higher amount of demand response cleared at 9,000 MW in the summer season compared to the 8,100 MW cleared in the summer of 2024. All 9,000 MW of DR offered was cleared in this auction, whereas out of the 8,600 MW offered in the summer of 2024, only 8,100 MW cleared, which shows that if more had been offered, it could have cleared. DR has been steadily increasing at MISO. Two years ago, only 7,694 MW of DR were cleared. Even though MISO’s market monitor has repeatedly downplayed the capacity value of energy efficiency, interestingly, 27 MW of EE was offered and cleared in this auction compared to the 22 MW in the last auction.
MISO has three filings at FERC on DR reforms, each of which pertains to tightening how DR is tested, qualified, and accredited in future auctions. The bulk of MISO’s DR and Emergency Resources reforms kick in three years from now, but the most significant one, not allowing dual registration of load-modifying resources as emergency demand response resources, kicks in at next year’s auction. All these changes increase the uncertainty around how much DR ultimately will be offered in the 2026 auction. If a lower DR is offered in the next auction, prices could reach higher.
This auction also cleared all the Behind-the-Meter Generation (BTMG) offered (4,283 MW) and all the DR, EE, and BTMG offered, pointing to a greater need for these demand-side resources in future auctions. States like Wisconsin and Iowa are looking to address the state opt-out issue for retail DR to participate in MISO markets. Higher capacity prices show the need for MISO states to remove this hurdle for more DR to participate in MISO auctions.
MISO North had a net reduction of 2.5 GW of capacity
The overall generation capacity cleared in this auction was 120,738 MW. Approximately 121,015 MW was offered. Last summer, 123,395 MW was offered, and only 119,479 MW was cleared. Taking capacity accreditation into consideration, MISO states that overall, 137.8 GW was offered in 2025 compared to 140.7 GW in 2024. MISO says new capacity additions have not kept pace with decreased accreditation, generation retirements, and external resources. By that statement, MISO means the MISO North region has not kept pace with capacity additions because it was net zero for the South region.
In the MISO North region, which is the classic MISO region before Entergy and other utilities joined MISO in the south, 100 GW was offered in 2025 compared to the 102.4 GW offered in 2024. MISO North had 3.6 GW of new capacity, 1.1 GW of increased accreditation, and a decrease of 3.4 GW due to accreditation, 2.9 GW due to retirements/suspensions, and 0.9 GW due to external resources. So, an increase of 4.7 GW but a decrease of 7.2 GW. Hence, a net reduction of 2.5 GW capacity in the North region. In the South region, the new capacity additions nearly offset the reductions in accreditation, retirements, and external resources.
