Tuesday, March 19, 2019

MISO MEP Cost Allocation Plan Goes to FERC

By Amanda Durish Cook

MISO and a majority of its transmission owners on Monday filed a new cost allocation plan with FERC that would change the way the RTO allocates costs for its market efficiency projects (MEPs).

The proposal applies to MISO’s 2019 Transmission Expansion Plan and includes MISO South, which saw its five-year transmission cost-sharing moratorium expire at the end of 2018.

The 622-page filing includes proposals to lower the voltage threshold for MEPs from 345 kV to 230 kV and eliminate a 20% footprint-wide postage-stamp cost allocation method for projects. It will also create two new project benefit metrics: the value of deferred or avoided reliability transmission projects, and the value of reducing power flows on the contract path on shared transmission from MISO Midwest to South (ER19-1124, ER19-1125).

| MISO

The proposal additionally creates a new category for economic projects below 230 kV and above 100 kV where 100% of costs would be allocated to the local transmission pricing zone. Such projects were previously categorized as “other” transmission projects without clear allocation rules.

MISO said the proposal was “extensively vetted” through its stakeholder process for more than three years. It noted that the package creates “additional opportunities for the identification and approval of market efficiency projects and greater precision in cost allocation for such projects, and formalizes the process for development of locally based economically beneficial projects.”

The RTO told FERC that the lower voltage threshold will likely result in more MEPs and, by extension, more opportunities to bid projects under the competitive transmission process. Because of the expected uptick in activity, MISO also proposed a limited exception to the competitive selection process for MEPs that can also demonstrate an immediate reliability need. The exception would only apply when a lengthy bid selection process would push a project’s in-service date past the expected reliability need date, MISO said, urging the commission to accept the provision, because it had approved similar selection exceptions in three other RTOs.

More Benefit Metrics?

MISO last year opened the door to the two new benefit metrics on MEPs besides the usual adjusted production costs; earlier this month staff signaled willingness to add even more benefit metrics to the list this year.

At the February Planning Subcommittee meeting, MISO planning coordinator Adam Solomon said the RTO and stakeholders will likely begin with ideas that didn’t make the cut last year, including increased capacity import and export limits, reduced congestion from fewer transmission outages, reduced transmission losses and the ability of a project to boost grid resilience.

MISO will work with stakeholders to identify new benefit metrics to pursue during the first half of the year and then determine how to quantify them during the second half. The work could culminate in a FERC filing by the end of the 2019.

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