By Amanda Durish Cook

SPP’s Market Monitor is cautioning that MISO and SPP must rethink some of their fees and practices before rolling out coordinated transaction scheduling (CTS) across their shared seam.

Internal Market Monitor Keith Collins says that introduction of CTS to maximize use of unscheduled transmission capacity could be ineffective unless the two RTOs remove the transmission fees and market charges they impose on each other.

“The benefits are difficult to quantify,” Collins said during an April 13 teleconference of the Seams Liaison Committee (SLC) of the Organization of MISO States (OMS) and the SPP Regional State Committee (RSC).

Collins said he’s collaborating with MISO Independent Market Monitor David Patton on a study to quantify possible benefits, which will likely be finished in early May. The study is part of the Monitors’ joint investigation of seams issues performed at the behest of regulators in both footprints.

“If we leave things as is, I think it’s important to understand that there may be no benefits … There need to be some additional changes in order to unlock benefits,” Collins said.

Collins additionally advised that MISO and SPP must improve the accuracy of their price forecasting to ensure that CTS delivers on its promises. The current approach to calculating forecasted prices “removes all benefits of a CTS product” because both RTOs find it difficult to anticipate price spikes or negative prices, he said.

“Assuming the current market products and market constructs, there is potentially no benefit to implementing CTS. Assuming no transaction costs and perfect knowledge of prices, CTS can likely improve total market welfare,” he said.

Collins singled out SPP for its oft-unstable prices.

“When prices can go up and down several hundred dollars in the space of five to ten minutes, it can erode some of the potential benefits of CTS if you were caught sending power at the wrong time,” he said.

SPP will soon file with FERC for approval of a ramping product designed to address its price volatility, which Collins said should help facilitate use of CTS.

MISO and PJM launched CTS across their shared border in late 2017 to allow market participants to schedule economic transmission transactions based on forecasted energy prices. PJM reported in November that CTS transactions accounted for about 19 MW per interval from June to September 2019.

M2M Efforts Proceed

Meanwhile, MISO’s IMM is wrapping up a study of the effectiveness of a MISO-SPP effort to coordinate the management of congestion on market-to-market (M2M) flowgates when one RTO is able to provide relief for a constraint.

Patton said he estimates that M2M congestion “would fall by $35 million annually if the M2M processes were administered perfectly.” The two RTOs combined rack up a little more than $184 million per year in M2M congestion due to delays or failures in testing for M2M flowgates and delays in activating them for monitoring.

To maximize flowgate management, Patton said, the RTOs should seek out, test and activate as M2M constraints the shared transmission most prone to binding. He said MISO and SPP could “accelerate” their testing and activation efforts.

The IMM will release final study results and more pointed recommendations in May.

Unsurprisingly, SPP’s Riverton-Neosho-Blackberry flowgate on the Kansas-Missouri border again weighs in as the most expensive based on preliminary numbers, costing MISO nearly $13 million in M2M settlement payments to SPP over the past two years. The flowgate has routinely been cited as the most expensive between the RTOs. (See SPP Briefs: M2M Payments from MISO to SPP Eclipse $32M.)

MISO and SPP said they are working together to estimate the congestion costs for each RTO for the top 10 most expensive flowgates in each direction. RTO staff said they would present the congestion cost estimates of the 20 flowgates at the SLC meeting in May.