MISO defended its first storage-as-transmission proposal before FERC staff this week, maintaining the plan is a good interim measure while the RTO designs a more permanent approach.

The contentious proposal was the focus of a May 4 technical conference to allow FERC to weigh the merits of the plan. (See MISO SATOA Proposal Set for Technical Conference.) Many MISO stakeholders have complained that the proposed ruleset would give incumbent TOs an effective monopoly on storage assets functioning as transmission, harming competition. (See MISO SATOA Proposal Faces Opposition.)

The plan limits storage-as-transmission assets to transmission-only functions operated by MISO-defined transmission owners. As such, a new category of storage-as-transmission-only assets (SATOA) would be barred from simultaneous participation in MISO’s energy markets — for now. The RTO has contended that its plan will avoid introducing complexities around cost recovery, particularly the thorny issue of how to compensate non-TOs for providing transmission services.

But FERC in March ruled that MISO’s bid to include storage options in its annual transmission planning might be “unjust, unreasonable, unduly discriminatory or preferential,” suspending the provisions until Aug. 11 and calling for the conference (ER20-588).

FERC Chairman Neil Chatterjee opened the commission’s first-ever virtual conference saying that he would pay special attention to the subject matter.

“I believe electric storage is a transformative technology that will be crucial to the grid of the future,” Chatterjee told listeners.

MISO Senior Manager of Competitive Transmission Administration Brian Pedersen called the proposal a “fundamental first step” in unlocking the full potential of energy storage facilities and said the plan represents a year-and-a-half of the RTO’s efforts in considering stakeholders’ opinions.

Pedersen acknowledged that some stakeholders advocated for storage to be allowed to simultaneously function as both transmission and energy market assets but said designing rules for dual-mode participation, a project selection process and a cost recovery mechanism for non-TOs would be too complex to implement right away.

“To do so would delay the issue by months, even years,” Pedersen said.

MISO officials said their approach to approving SATOA projects will factor in the length of time to get a SATOA resource operational versus traditional wires solutions, its effectiveness in resolving contingencies, availability and reaction times, what right-of-way space is necessary and the resource’s performance degradation over time. State-of-charge responsibilities will rest with the storage owner, though MISO could direct that a device be fully charged at certain times.

Pedersen said the RTO will also consider how the connection of a SATOA will impact generation awaiting interconnection in the queue.

Director of Planning Jeff Webb said MISO would not select SATOA devices in congested locations where several generation projects are vying for interconnection to avoid disrupting the generation queue. Stakeholders have voiced concern that SATOA projects would supersede planned generation projects by taking points of interconnection.

FERC staff said it wasn’t evident where the RTO’s proposal detailed such a no-harm process.

“I think it deserves some business practice manuals, but that’s the idea,” Webb said.

FERC staff also asked whether MISO expects SATOA to have the same impact on the generation interconnection queue as new traditional transmission projects.

“That’s hard to put your finger on … There’s a number of possibilities,” Webb said, adding that SATOA will be able to charge to offload lines as well.

Storage solutions that function more like energy resources will not be selected through the annual MISO Transmission Expansion Plan (MTEP) and will instead have to connect to the grid through the interconnection queue, Webb said. MISO expects that the more complicated a transmission issue is, the less likely a storage facility will be able to solve it.

Webb said the RTO envisions storage would most often resolve “N-1, steady-state issues.” A battery is less likely to “be at the right state of charge” and ready for dispatch to solve rapidly emerging second contingencies. But MISO executives also said SATOAs will solve transmission issues complex enough that MISO will need functional control of the storage facility.

“We’re at the front end of this; we haven’t seen all transmission problems that storage could solve,” Webb added.

Pedersen said that, “all things being equal,” MISO would lean toward traditional wires solutions in the event of a tie because wires are historically better at mitigating stacked contingencies and currently have longer lifespans.

The RTO’s MTEP report will include the rationale for SATOAs that are selected, Pedersen said. Stakeholders can address additional questions about SATOA selection to MISO’s subregional planning meetings throughout the year. SATOA will be subject to the same planning studies required of other transmission projects.

In response to a FERC staff question about whether SATOA energy injections would impact MISO’s market-based activity, Webb said even conventional wires have some impact on the energy market.

“Anytime you change the topology of the grid … yes, there will be some impact,” he said. “We think these situations are going to be minimal.”

“It isn’t a completely new concept for transmission to affect markets,” Webb added.

MISO will develop operational guides with SATOA owners to ensure energy market impacts are minimized. He said SATOAs, non-transmission alternatives (NTAs) and traditional transmission projects all involve assurances to the RTO that projects will be completed, either through the MISO transmission owners agreement or through individual interconnection agreements.

Not Comparable

DTE Energy’s Nick Griffin, whose company is a vocal opponent of MISO’s proposal, asked why the RTO couldn’t simply ask market-based storage facilities to keep some charge reserved for transmission issues.

Webb said that discussion is best reserved for MISO’s planned discussions on dual-mode participation in 2021.

Griffin said DTE Energy continues to believe that the RTO’s proposal creates unduly discriminatory preference for transmission owners over generation owners with comparable projects.

FERC staff at the conference said they were aware of the allegations of discriminatory treatment surrounding MISO’s proposal. They asked why the RTO’s proposal was necessary since it already has rules in place for selecting NTAs in the place of transmission projects. NTAs must first clear MISO’s roughly three-year generation interconnection queue before being placed in-service, while SATOAs need only be selected in the annual MTEP process for grid connection.

“If someone came and invoked undue preference, I’m not sure how we could address it besides give them the same deal,” FERC staffer Rahim Amerkhail said.

“What we’re trying to do here is not reclassify assets and redefine revenue streams but see how we can extract extra value from storage with these specific boundaries around what is generation and transmission,” Webb said.

Clean Grid Alliance’s Rhonda Peters said she took issue with the fact that SATOAs and NTAs will be subject to different study processes that can include diverging assumptions.

Webb responded that issues stemming from the different assumptions in generator interconnection studies and MTEP studies are not unique to SATOA projects. MISO is currently working with stakeholders to better synch the two. (See MISO Begins Bid to Merge Tx, Queue Planning.)

“I think it’s really up for debate that the studies produce comparable results,” Peters said.

Responding to another FERC staff question, Webb said MISO has not contemplated a process for transitioning a SATOA to an energy market asset when it is no longer needed as a transmission resource due to load or grid changes.

“That’s something we have not bitten off in this filing,” he said.