MISO will file at FERC in December to extend a rate schedule that determines the payments market participants shell out for using the RTO’s Midwest-to-South transmission path.
Staff revealed Thursday that they are only asking for a one-year extension through Jan. 31, 2022. MISO had first proposed two years.
The rate schedule, set to expire in February, lays out the cost allocation for market participants that use the subregional transfer limit beyond the 1,000-MW contract path linking MISO’s Midwest and South regions. The rate schedule is separate from the RTO’s 2014 settlement agreement with SPP and other parties that set a 3,000-MW limit on north-to-south flows and a 2,500-MW limit in the other direction.
MISO Director of Seams Coordination Jeremiah Doner said the shorter timeline would allow MISO to begin stakeholder discussions on a possible new cost allocation.
Doner said it makes sense to work on a longer-term rate schedule because MISO will likely continue to use the transmission transfer limit for the foreseeable future. The grid operator does not have any transmission projects lined up that can serve as an alternative. Earlier this year it ruled out using new transmission upgrades to secure more transfer capability between its subregions. (See “No Midwest-South Tx Solution this Year,” Price Tag Rising for MTEP 20.)
“It was pretty much locked down in August. Why the sudden change?” Mississippi Public Service Commission consultant Bill Booth asked of the one-year extension.
Doner said that in August, some stakeholders seemed eager to renegotiate the rate schedule. He also said the shorter extension lines up with a possible new agreement with SPP and the joint parties.
Effective Jan. 31 next year, the agreement may be terminated by any party with a year’s notice. However, the parties signed a memorandum of understanding that they would not propose changes to the settlement until Feb. 1, 2022. (See MISO Seeks Extension on Midwest-South Tx Limit.)
Without a revised settlement, flows would be limited to MISO’s original 1,000-MW contract path in either direction.
Under this approach, Doner said negotiations on the settlement and cost allocation can take place in tandem in 2022. The rate schedule would reflect any new terms from the settlement agreement, he said.
Currently, MISO’s payments to SPP and other parties for flows across the transfer limit are recovered from market participants through a combination of load-ratio calculations and flow-based beneficiary allocations.
The load-based share has declined every year since 2016 as the flow-based portion increased. From Feb. 1, 2016, to Jan. 31, 2017, the allocation was 45% load-based and 55% flow-based. From Feb. 1, 2020, to Jan. 31, 2021, the mix is 10% load-based and 90% flow-based.
