By Amanda Durish Cook

FERC on Tuesday rejected MISO’s proposed pro forma agreement for pseudo-tying generation into PJM, saying the rules around termination were too broad.

“Although we believe that a pro forma pseudo-tie agreement is a beneficial instrument to promote uniformity, transparency and certainty as to what the responsibilities and obligations are with respect to the increasing interest to use pseudo-tie arrangements, we find that parts of the MISO agreement have not been shown to be just and reasonable,” FERC said in its order (ER17-1061).

The commission encouraged MISO to file a revised version.

In rejecting the agreement, FERC said MISO’s proposed termination provisions did not align with already accepted revisions to the MISO-PJM joint operating agreement. (See FERC OKs Change to MISO, PJM Pseudo-Tie Rules.) The agreement was unclear about the meaning and consequences of a suspension, FERC said.

“The MISO agreement does not detail what happens to resources under suspension, how a resource may seek to resume normal operations, which balancing authority retains operational control of the resource while it is under suspension, or how a resource under suspension may be terminated,” FERC said.

The commission called the termination provisions “vague and open-ended.” While MISO proposed to give itself authority to “make all final determinations whether to implement or terminate [a] pseudo-tie,” FERC interpreted that language as granting the RTO the ability to terminate a pseudo-tie for any reason, provided it satisfied the six-months’ notice requirement.

The proposed agreement would have allowed MISO to suspend and terminate pseudo-ties if resource owners failed to provide real-time measurement values in a timely manner; if the generation-to-load distribution factor between MISO and PJM was not within 2%; and if a partially pseudo-tied resource injected more energy into MISO than the modeled limit.

MISO also proposed that a pseudo-tie maintain firm transmission service from source to sink for the life of the pseudo-tie, and that it could terminate a pseudo-tie if reliability is threatened, with no notice beyond compliance with NERC standards. However, the RTO proposed that its pro forma requirements would not be retroactively applied to existing pseudo-ties, provided that those existing pseudo-ties aren’t modified. In the event of a modification, MISO would restudy the pseudo-tie.

The rejected proposal was the subject of a deficiency letter last year in which FERC questioned under what circumstances MISO could revoke a pseudo-tie. (See MISO, PJM Respond to FERC’s Pseudo-Tie Questions.)

FERC’s ruling also dismissed as moot a protest and rehearing request by the Illinois Municipal Electric Agency, which had complained that MISO’s proposal threatened the vested rights of market participants with long-term historic generation and transmission rights to serve load. The agency argued that MISO could terminate its long-term, fixed transmission rights at any time and that the proposed 2% distribution load provision “suffers from a lack of transparency because modeling upon which this provision is based is complex and, for the most part, confidential” between PJM and MISO.

IMEA also contended the agreement should be between MISO, PJM and the pseudo-tie owner, rather than just MISO and the owner.

MISO Reaction; IMM Reliability Suspicions

MISO briefly addressed FERC’s rejection during a Feb. 28 MISO-PJM Joint and Common Market meeting, saying it intends to file again.

“MISO feels that the circumstances surrounding that agreement still exist, and the agreement is still needed,” Director of Market Design Kevin Vannoy told meeting attendees. The RTO plans to return to the Reliability Subcommittee sometime in spring to revise the agreement with stakeholders.

MISO and PJM staff at the meeting also noted they have reliably administered a considerable increase in pseudo-ties since the start of the 2016/17 planning year. MISO says its total pseudo-tied volume increased from 1,966 MW in June 2015 to 5,668 MW in June 2016.

But MISO’s Independent Market Monitor challenged the RTOs’ assertion that pseudo-tied generation has operated reliably.

IMM staffer Michael Wander asked if either RTO could deny that they’ve experienced control room “emergencies” as a result of poorly managed pseudo-ties, but both Vannoy and PJM officials said they didn’t understand the question and would not answer it.

“Let me rephrase. Would you say there haven’t been any extraordinary actions taken?” Wander asked. “Because when you say you’ve implemented those reliably, that means business as usual, but that’s not what I’m hearing from reliability coordinators.”

MISO and PJM staff denied that pseudo-ties have affected reliability.

Wander ended the exchange by saying he would provide RTO leaders with confidential pseudo-tie data that have been troubling the Monitor. Staff agreed they could hold a later discussion on the matter.