By Tom Kleckner
ORLANDO, Fla. — MISO, SPP and their stakeholders have been flummoxed in recent years by market coordination, interregional planning and other issues across the grid operators’ seam. Now, the regulators are stepping in.
On Sunday, state regulators from MISO’s Organization of MISO States and SPP’s Regional State Committee met with staff from both RTOs and other interested stakeholders on the sidelines of the annual meeting of the National Association of Regulatory Utility Commissioners.
Two of the more interested participants were FERC Commissioner Cheryl LaFleur and Iowa Utilities Board Member Nick Wagner, NARUC’s newly installed president.
“This is a terrific opportunity to spend time face to face, talking about these things, given the length and complexity of the seam between the two,” LaFleur said. “It’s a tremendous opportunity to do things better in both respective market operations, as well as transmission and reliability operations on the seam, all to the benefit of the customers.”
LaFleur praised the two committees and their engagement with their RTOs. “It’s only logical these would be the two groups best to engage and put your heads together on the issues between the seams,” she said.
Wagner, whose state falls within MISO, told RTO Insider he was looking out for Iowa consumers and wants to ensure inefficiencies on the seam “are not costing consumers more than they should be.”
“We’ve seen issues on other seams. It’s not a novel issue,” Wagner said, referring to the PJM-MISO seam.
Shining a Light
MISO and SPP have been unable to agree on a single interregional project, and their market-to-market (M2M) process has resulted in more than $51 million in payments from MISO to SPP since March 2015, compensation for overloaded transmission elements. In January and September of this year, extreme weather events created emergency situations on MISO’s side of the seam. (See FERC, NERC to Probe January Outages in MISO South and 3-Degree Forecast Error Triggered MISO September Emergency.)
Missouri Public Service Commissioner Daniel Hall, who chaired the OMS-RSC liaison committee meeting, told MISO and SPP staff, “Anytime we can get the two of you working together, that’s a good thing.”
Hall represents the OMS on the committee along with Louisiana’s Lambert Boissiere, North Dakota’s Julie Fedorchak and Minnesota’s Matt Schuerger. Kansas’ Shari Feist Albrecht, South Dakota’s Kristie Fiegen, Arkansas’ Kim O’Guinn and Texas’ DeAnn Walker represent the RSC. Wagner is an ex officio member.
“There’s value in shining a light on these seams issues and ongoing efforts to address them,” Hall said. “This is an excellent forum where we can identify issues [and] work collaboratively with MISO and SPP and other stakeholders to find solutions and track the progress.”
“I know there’s a role for FERC,” LaFleur said. “I do think there is some comparability between what’s happening on the SPP-MISO seam and what happened between PJM and MISO 20 years ago. Though it’s a lovefest now, it was very contentious at one point.”
The liaison committee — “or task force, or whatever we’re calling ourselves,” Hall said — reviewed a draft white paper it had requested from MISO and SPP staff. Working with regulatory staffers, the grid operators were to identify barriers to more efficient seams operations and transmission planning, offering solutions whenever possible.
Calling the white paper a “foundational document,” Hall said he expects to request additional information from MISO and SPP and solicit stakeholder comments.
Adam McKinnie, a Missouri PSC economist who works with both committees, framed the white paper as a means of better understanding the dynamics of issues on the seam. He said its strength was in discussing the history behind previous interregional planning efforts, improvements to the M2M process, contract path capacity sharing and flowgate allocation.
Citing the complexity involved, McKinnie said the white paper doesn’t address pancake rates, conditional generator interconnection agreements and the grid operators’ 2015 settlement agreement on MISO’s North-South flows. (See FERC OKs MISO-SPP Transmission Settlement.)
Asked whether the M2M payments are a symptom of inefficiency, McKinnie said, “These payments are definitely smoke. They are sending signals that there are issues in the area.”
The M2M process determines which party has exceeded its allowed usage of an overloaded transmission element. The grid operator over its allotment is required to find a solution that relieves the congestion.
“If MISO is paying SPP, it’s because it’s cheaper than a transmission solution,” McKinnie said.
The usage allotment is based on metrics that date back to 2004. Staff agreed the process needs to be updated, but the RTOs continue to negotiate how to revise the allotment.
The grid operators also face a 2020 renegotiation of their joint operating agreement, in place since 2004. The JOA has been amended “many times” since then, McKinnie said, including implementation of the M2M payments and a FERC Order 1000 compliance filing. The grid operators also have a memorandum of understanding that guides the M2M process.
Noting MISO and SPP take different positions on fundamental ideas and Tariff and contract interpretations, McKinnie told Hall he thinks the RTOs are “doing a decent job of being focused on the right issues.”
“There seems to be some talking past each other,” Schuerger pointed out.
“We have worked to close the gap,” said Melissa Seymour, MISO’s executive director of customer and state affairs for the Central region.
Seymour pointed to the “significant amount of time” MISO staff have spent with SPP in preventing another occurrence of the January event, when severe cold weather and generation shortfalls in MISO South led MISO to exceed its regional dispatch limit on transfers across SPP’s system between its northern and southern footprints.
When MISO was forced to declare a maximum generation alert in September, the grid operators agreed communications across the seams was improved.
“We’ve been meeting on a monthly, sometimes weekly, basis with SPP,” Seymour said. “I think camaraderie is better as a result of that September event.”
“They don’t do a good job of telling their story,” McKinnie said.
SPP Director of Regulatory Policy Sam Loudenslager agreed. “We don’t publicize the positive events like we probably could.”