Monday, June 18, 2018

SPP Briefs

Long Odds for 2nd MISO-SPP Joint Study

The odds of SPP and MISO conducting a second joint study dropped last week with the announcement that the RTOs’ respective regional reviews are not lining up as expected.

spp miso z2 task force

Bell © RTO Insider

The two RTOs had hoped to conduct a broad joint study starting as soon as this year that would evaluate regional and interregional projects on the same timeline, eliminating a major stakeholder complaint. (See SPP-MISO IPSAC Turns Attention to 2017 Study.) However, staff told the MISO-SPP Interregional Planning Stakeholder Advisory Committee on Thursday that their respective timelines are not lining up as expected.

“That created issues in scoping and planning. We hope to provide more detail and a schedule,” Adam Bell, SPP’s interregional coordinator, told the IPSAC. “We’re both very committed to doing a study to the extent it makes sense. We’re looking at what flexibility SPP has and what flexibility MISO has to work through the challenges this has presented.”

Bell said MISO’s Regional Transmission Overlay Study (RTOS), which will end in December 2019, is targeting the end of next year to determine transmission projects that can address the RTO’s shifting resource mix. (See MISO Begins 3-Year Tx Overlay Study.) However, SPP’s transition to its new Integrated Transmission Planning process won’t result in the release of an economic study until October 2019.

spp miso z2 task force


Under the current timelines, MISO would spend 2019 building a business case around an approved portfolio. SPP is not scheduled to begin building its economic model until the third quarter of 2018.

“The timing is a little off in our ability to go through the process as we had originally envisioned,” Bell said. “It looked like they would match up very well. We would have board approvals at the same time, do interregional work. … Jumping into something before we have all that worked out is not something we need to do.”

Bell reassured stakeholders the two RTOs would still conduct “some sort” of joint planning in 2017 as part of their desire to take a more comprehensive look at reliability and economic transmission upgrades. He said staff would work with their regional stakeholder groups to resolve the misaligned timelines. A follow-up conference call has been tentatively scheduled for April 24.

“We all see the benefit of doing this broader study,” Bell said. “We pretty much know when things will start and finish. We’re trying to see now if there is any flexibility” in the timelines.

Several stakeholders were confused as to why staff had waited until the IPSAC meeting to bring the issue into the open. ITC Holdings’ Marguerite Wagner pointed out one of the goals of SPP’s new ITP process, which was approved last July, was to align it with MISO’s timeline.” (See “SPC, MOPC Approve Improvements to SPP’s Tx Planning Process,” SPP Strategic Planning Committee Briefs.)

“As far as I know, the SPP process has been developed for months,” said the Wind Coalition’s Steve Gaw. “I’m not sure why it’s this meeting [that you discovered] you have an issue.”

“We’ll get back at the RTO regional level and work on the schedules a little bit,” promised MISO Director of Planning Jeff Webb. “It’s a good opportunity to get them back in alignment.”

The IPSAC spent much of the meeting reviewing each RTO’s planning processes and efforts being made to improve them. The first joint study between the two entities failed to produce a single interregional project; they have focused their efforts since on improving their coordination. (See SPP, MISO Conclude Joint Study Empty-Handed.)

“Someone smarter than me once said the definition of insanity is doing the same thing over and over and expecting different results,” said Eric Thoms, MISO’s manager of planning coordination and strategy. “We want to be more forward-thinking and understand why we are getting drastic differences in our interregional outcomes and studies.”

As an example, MISO’s Ling Lao detailed to stakeholders how the RTOs calculate the adjusted production cost (APC) differently for the Coordinated System Plan (CSP), a separate interregional effort from the joint study. The calculation is used for allocating costs between the two entities.

spp miso z2 task force


Lao said the MISO-SPP joint operating agreement outlines the APC-calculation methodology at a high level, similar to SPP’s regional methodology. SPP uses the load LMP for pricing purchases and generation LMP for pricing sales. MISO, on the other hand, uses the generation LMP for pricing both purchases and sales in its metrics.

The load LMP is usually higher than the generation LMP when the system is congested, yielding higher project benefits or APC savings, Lao said. Thoms said MISO is currently evaluating changes to its APC calculation in its Regional Expansion Criteria & Benefits Working Group.

“Using different calculation methodologies introduces equity concerns,” said SPP Director of Interregional Relations David Kelley. “It doesn’t necessarily mean we know one method is better than the other. Could it be MISO is underestimating its benefits? Yes, but on the other side of the fence, you would say SPP is overestimating its benefits.”

The APC was part of a screening process that has whittled the CSP’s list of seven potential joint transmission projects down to three. (See “SPP-MISO IPSAC Turns Attention to 2017 Study, SPP Briefs.)

Staff said the three preliminary projects passing the study criteria are:

  • A second 345/115-kV transformer in western Minnesota;
  • A 161-kV line near Kansas City; and
  • A 345-kV line and a 345/161-kV transformer near Springfield, Mo.

AECI Joint Projects Move Forward

The Springfield project would be in the same area where SPP’s joint CSP with Associated Electric Cooperative Inc. identified two projects: a 50-MVAR reactor at Springfield’s 345-kV Brookline substation, and a new 345/161-kV transformer at AECI’s Morgan substation and an uprate of a related 161-kV line.

SPP’s Seams Steering Committee took up both projects during its March 8 meeting. The Brookline reactor has an estimated cost of $1.1 million, below the $5 million minimum for SPP seams projects. However, staff said it sees a benefit in continuing forward with the project.

The SSC will meet again March 24 to discuss the project, in hopes of making a recommendation to the Markets and Operations Policy Committee in April.

The Morgan transformer was included in the 2017 ITP 10-Year assessment that was approved by the MOPC and SPP’s Board of Directors in January. The project, valued at $9.2 million, is contingent on reaching a cost-allocation agreement with AECI.

SPP’s monthly market-to-market report to the committee showed MISO sent another $250,762 in M2M payments to its seams partner in January, thanks to a net 230 hours of binding. SPP paid MISO just more than $51,000 for 126 hours binding over 11 temporary flowgates.

MISO has made $14.5 million in M2M payments since the RTOs began in the process in March 2015. When SPP completes two years of the M2M process in March, it will be at the same stage MISO and PJM were when they developed their targeted market efficiency projects on their seam.

The projects address historical congestion issues on the MISO-PJM seam, and MISO and SPP said they are committed to following a similar approach later this year. The process focuses on small, low-cost, short-lead-time upgrades targeted at specific, historical congestion issues.

Z2 Task Force Narrowing its Alternatives

The Z2 Task Force met in Dallas on March 8 to review PJM and MISO’s processes for incremental long-term congestion rights, which the group is considering as an alternative to its current crediting system for transmission upgrades. (See SPP Z2 Task Force Looks for Best of Proposals.)

The task force developed a list of alternatives for sponsored upgrades, transmission service upgrades and generation interconnections. ILTCRs remain a potential solution in each of the three categories, along with the existing Z2 processes, albeit with some modifications.

spp strategic planning committee transmission

KCP&L’s Denise Buffington | © RTO Insider

American Electric Power’s Richard Ross and consultant Dennis Reed will also bring proposals to the group’s next meeting. The task force plans to narrow down the list of proposals and then develop the details in order to meet a July deadline with the MOPC.

“We’re a task force,” Kansas City Power & Light’s Denise Buffington, the group’s chair, reminded her team. “We can propose language, but we are going to address the policy question with the board first.”

Buffington said it would be up to the board whether a task force or some other group drafts new policy language.

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