Missouri regulators have opened a working case to determine whether the state’s investor-owned utilities’ continued RTO membership “is in the ratepayers’ best interest.”

The state’s Public Service Commission issued an order on Oct. 14 that directs each IOU to participate in a workshop that has yet to be scheduled and to cooperate with the “investigation.” PSC staff will file a report with their findings by June 30, 2021 (EW-2021-0104).

The order applies to Evergy Missouri Metro, Evergy Missouri West, Empire District Electric and Ameren Missouri. Evergy Metro and Empire are SPP members; Ameren is a MISO member; and Evergy West is a member of both.

The PSC said it “believes there are benefits” to the IOUs’ RTO memberships but that they “exceed the long-term costs and commitments of RTO membership, especially given that the structure, services and membership of both Southwest Power Pool and the Midcontinent Independent System Operator continue to change significantly with the passage of time.

“The commission must inquire into the nature of the benefits of RTO membership, the monetized value of those benefits and what time horizons should be employed to compare asset lives (costs) to the values of benefits streams,” the PSC said.

According to the order, the workshop will determine:

• • • the information needed to respond to the commission’s current and previous orders on RTO membership;
    • whether such information is reasonably and economically available, and if not, what kind of information could be used as a proxy to control costs and expeditiously respond to the commission;
    • the cost of gathering, analyzing and interpreting such information; and
    • whether there are any identifiable “deal breaker” events or event categories that would make it unreasonable for an IOU to remain in an RTO.

SPP said it welcomes the study and stands ready to support its members’ efforts to “evaluate the cost and benefits of their membership.”

“We fully respect that the states and utilities we serve need to ensure they’re receiving adequate value from their membership in SPP,” spokesman Derek Wingfield said. “We remain committed to continually finding new ways of adding value in collaboration with our stakeholders.”

MISO said it is aware of the investigation and is waiting for further guidance on how to assist.

The issue stems back to the early aughts, when the PSC initially placed contingencies on IOUs wishing to transfer functional control of their transmission systems to the RTOs. That allowed the commission to maintain jurisdiction and better understand whether RTO membership would provide the IOUs’ expected benefits, former Commissioner Steve Gaw said.

“At that time, there was no track history to go by in the Midwest, and the net-benefit calculations were estimated,” said Gaw, now with Advanced Power Alliance after six years on the PSC.

The problem has been that the IOUs have continually kicked the proverbial can down the road.

In 2011, the Evergy companies — then operating as Kansas City Power & Light — filed an interim report requesting the commission approve their continued participation in SPP beyond October 2013. In May 2013, the commission approved an interim agreement between KCP&L, PSC staff, the Office of the Public Counsel (OPC), SPP and Dogwood Energy that extended its approval through September 2018 (EO-2012-0136).

Four years later, the commission accepted the companies’ motion to extend the interim period to 2021 and to absolve them of the requirement to file the 2017 interim report.

Ameren Missouri, which does business as Union Electric, received PSC approval in 2012 to transfer functional control of its transmission system to MISO, subject to certain conditions. Those conditions required the utility to file a new case addressing its continued participation in the RTO in 2015. At Ameren’s request, the commission extended the date to November 2017 and then March 2020 (EO-2011-0128).

In March 2019, the commission granted a motion by Ameren, commission staff, the OPC and the Missouri Industrial Energy Consumers to delay the rate-case filing until March 2023.

Acknowledging Ameren’s contention that “it would be unduly expensive to perform the comprehensive cost-benefit study” necessary to assess the value of its MISO membership, the PSC agreed that the study’s cost “outweighs the importance of the study.”