MISO Faces 5 GW Capacity Deficit, Forcing Emergency Extensions for Retiring Coal Plants

The Deficit Accelerates

MISO's February 2026 preliminary auction data paints a stark picture of a grid in transition. The initial planning reserve margin requirement is set at 137.5 GW to meet a 124.7 GW coincident peak forecast for summer. However, the preliminary accredited capacity (which measures what plants can physically deliver during extreme weather, rather than their nameplate rating) stands at only 135.6 GW.

This translates to an immediate 5 GW deficit, driven by a projected 2 GW increase in raw load. Looking forward, MISO's internal modeling warns that if current trends hold, the capacity deficit could balloon to an unmanageable 14 GW by the 2029/2030 planning year, driven heavily by data center construction in states like Indiana and Missouri.

Federal Emergency Orders Keep the Lights On

To plug the immediate gap, MISO is relying on extraordinary measures. Throughout February 2026, the grid operator saw a 15% increase in overall electricity generation year-over-year, but the composition of that generation was completely skewed.

With natural gas prices elevated and hydro output down, MISO experienced a massive 61% surge in coal-fired generation. Much of this coal capacity was legally scheduled to retire for economic and environmental reasons. However, a federal emergency order—extended from February 17 through May 18, 2026—mandated that critical coal generation remain online to prevent widespread blackouts during the severe winter storms.

This regulatory triage highlights the fragility of the MISO interconnect: the grid cannot function without aging, heavily polluting assets that the market economics had already condemned.

Transmission and Fast-Tracking Fixes

MISO is actively attempting to build its way out of the crisis. At the February 2026 Resource Adequacy Subcommittee (RASC) meetings, leadership unveiled the $8.8 billion 2026 Transmission Expansion Plan (MTEP 26). Approximately $3.1 billion of this plan is dedicated solely to addressing load growth "hot spots," primarily in the Midwest manufacturing corridor.

Furthermore, MISO is heavily utilizing fast-tracked interconnection initiatives. The grid operator expects to announce approval for 6 GW of expedited generation projects in March 2026—notably, 75% of these expedited projects are natural gas-fired, signaling a temporary pause in the aggressive shift toward intermittent renewables in favor of dispatchable baseload.

Commercial Procurement and Budgeting Advice

• Budget for CONE in April: Commercial footprints in MISO North and Central should proactively budget for capacity clearing prices to hit the Cost of New Entry (CONE) cap when the auction results are released on April 28th. The 5 GW physical deficit leaves little room for downside pricing surprises.
• Validate Your Capacity Tag (PLC): Because capacity costs will represent an outsized portion of Midwest energy bills in 2026, aggressively managing your Peak Load Contribution (PLC) during the summer coincident peak hours is the most effective cost-mitigation strategy available.
• Demand Response Premiums: With the grid so starved for reserves, MISO Local Balancing Authorities (LBAs) and third-party curtailment service providers (CSPs) will likely increase the incentive payouts for commercial facilities willing to offer curtailable load programs during the summer peak season.

Source: MISO Resource Adequacy Subcommittee (RASC); North American Electric Reliability Corporation (NERC); Federal Energy Regulatory Commission (FERC).