The electric grid operator for the U.S. Midwest on Thursday drew attention to the pressing need to reform power markets in the face of a shifting generation fleet and worsening extreme weather, even as it had enough capacity to meet demand in 2023-24.

The reforms are needed "to maintain reliability and send the right pricing signals to the market," said Clair Moeller, president and CEO at Midcontinent Independent System Operator (MISO).

MISO said the grid it operates, spanning 15 U.S. states and Manitoba province in Canada together home to 45 million people, will have sufficient generation capacity to meet demand for the 2023-24 planning year that begins on June 1.

Its planning resource auction cleared at $10 per megawatt-day (MW-day) for the summer quarter, $15/MW-day for fall, $2/MW-day for winter, and $10/MW-day for spring in all but one of its operational zones.

For the zone which covers most of Louisiana and southeast Texas, the clearing prices for fall and winter were $59/MW-day and $19/MW-day, respectively.

But the lower prices don't detract from "urgently moving ahead with market reforms to align resource performance and system reliability needs as the resource mix evolves, extreme weather events intensify and electrification expands," said Todd Ramey, MISO’s senior vice president of markets and digital strategy.

Market participants who postpone the retirement of resources and import additional capacity this year may not be able to repeat those measures in the future, said Moeller.

"We continue to see uncertainty and volatility in the auction results year-over-year, and managing the system in real-time is becoming more challenging," Moeller added.

MISO could fall short in meeting above-normal peak demand if wind generators perform below expectations, but the risk is lower than in 2022, the North American Electric Reliability Corp said in its summer outlook on Wednesday.

(Reporting by Deep Vakil in Bengaluru; Editing by Aurora Ellis)