MISO South states have signaled their intent to strike out on their own on a cost allocation design for long-range transmission projects located exclusively in the South subregion.
South regulators proposed their own cost allocation design process under FERC’s Order 1920, which could produce a cost-sharing plan that could override MISO’s recommended allocation for new transmission projects. (See State Regulators Weigh Drafting Alternative to MISO Tx Cost Allocation.)
During a Nov. 18 MISO teleconference, New Orleans City Council attorney David Shaffer, representing MISO South states, introduced the proposal southern regulators put together.
“What’s envisioned is the state agreement process would apply to long-range transmission projects in the MISO South region,” Shaffer explained.
Shaffer emphasized that the MISO South state agreement process document is simply a framework to be used to design a cost allocation, not a cost allocation methodology itself.
According to the document, the South’s design process would last no longer than six months after the MISO Board of Directors approves a slate of long-range projects.
The document instructs MISO South states to devise cost allocations that are roughly commensurate with estimated benefits. It also stipulates that benefit estimations should meet the Entergy Regional State Committee’s criteria of “accurate, objective, measurable, quantifiable, non-duplicative, forward-looking, replicable and supported by data.”
Participation in the development of and votes on cost allocation methods would be limited to relevant state entities, Shaffer said. However, state entities could agree unanimously to designate more organizations to participate in the process.
Some MISO stakeholders said the document was ambiguous as to when the design process would start.
FERC’s Order 1920 directs RTOs to involve states when developing or amending a long-term regional transmission cost allocation. It gives states the go-ahead to meet independently to negotiate and devise cost allocation methods to offer to FERC in place of RTOs’ methods.
MISO must file the state agreed-upon allocation alongside its own suggested allocation, even if it doesn’t agree with it. MISO previously said its established, 100% postage stamp to load allocation could work for South long-range planning. The RTO changed its stance after it announced that the first MISO South long-range planning effort would be limited to Louisiana and a portion of Texas. MISO leadership said they couldn’t picture using a subregional postage stamp allocation on a load-ratio basis for projects limited to just two states.
MISO South’s Entergy Regional State Committee has said it won’t support any postage stamp aspect in MISO’s long-range transmission allocation.
Prior to Order 1920, the Entergy Regional State Committee Working Group proposed an allocation in early 2024 for upcoming MISO South long-range transmission plan portfolios. It involves assigning 90% of costs based on adjusted production cost savings and avoided reliability projects; the remaining 10% would be charged to new generation that interconnects in MISO South based on a flow-based methodology. (See Entergy States Debut Long-range Tx Cost Allocation Proposal, MISO Members Unconvinced.)
Clean energy nonprofits have said Entergy and MISO South’s preferred approach isn’t broad enough and will leave the South continuing to build expensive local projects that don’t yield regional benefits. (See Clean Energy Orgs Push Entergy Players to Consider Broader Cost Allocation.)
MISO’s Jeremiah Doner said MISO will review the South state agreement process when it’s finalized around March 2026. He said the South’s allocation process will “have to be memorialized” in MISO’s tariff as part of Order 1920 compliance.
MISO’s Order 1920 compliance filing is due to FERC in June 2026.
