By Amanda Durish Cook

CARMEL, Ind. — Stakeholders are questioning a MISO proposal that would draw a sharp distinction between the cost allocation eligibility for interregional and internal projects.

The preliminary proposal would make cost sharing available to 100-kV projects along the PJM and SPP seams but limit it to internal market efficiency projects of 230 kV and above.

MISO staff have expressed confidence about the proposal — unveiled last month — and say the change will capture a reality in the footprint, where 230-kV lines are prevalent. (See MISO Recommends Cost-Sharing for Sub-345 kV Tx.) The plan also respects FERC’s 2016 order requiring MISO to lower its voltage threshold to 100 kV on interregional projects with PJM.

“Views can change in the next few months, but right now, we’re on a good path,” MISO Director of Strategy Jesse Moser said of the allocation proposal during a March 15 Regional Expansion Criteria and Benefits Working Group meeting.

Several stakeholders at the meeting asked MISO to consider lowering the internal market efficiency project voltage threshold to 100 kV, while others favored the 230-kV limit — and a few preferred keeping the 345-kV limit.

Ottertail Power’s Stacie Hebert said her company favors maintaining the 345-kV market efficiency project threshold, but it thought 230 kV was a “reasonable compromise.”

Moser said the divergent stakeholder views he’s heard on the proposal suggest the RTO may have struck a compromise.

But WEC Energy Group’s Chris Plante said he couldn’t understand the reason for the differing thresholds.

“We have difficulties reconciling a 100-kV interregional voltage threshold with a 230-kV voltage threshold for MISO market efficiency projects,” Plante said.

While Plante said his company could become comfortable with MISO’s proposed removal of the postage stamp rate, he asked the RTO to also examine the possibility of implementing separate postage stamp rates for the Midwest and South regions. Since Entergy joined the RTO in 2013, MISO South has been subject to an integration transition period, which limits cost sharing in the region.

Madison Gas and Electric’s Megan Wisersky also said her company supported “consistency between internal and interregional projects” and a regional postage stamp rate.

Changing Nature

MISO has recommended that it scrap its current footprint-wide postage stamp rate for market efficiency projects. The RTO currently allocates 80% of project costs to local resource zones based on expected benefits and recovers the other 20% via postage stamp allocation to all regional load.

The RTO wants to assign all costs to benefiting transmission pricing zones and work with stakeholders to create more specific benefit metrics and cost allocation zones. It currently relies on the postage stamp rate as a means of recognizing both benefits not currently quantified within its cost allocation and the changing nature of beneficiaries as the resource fleet evolves.

MISO planning coordinator Davey Lopez said the RTO’s current interregional cost-sharing rules are inconsistent and complicate interregional planning. To remedy this, Lopez said MISO must lower its SPP interregional cost-sharing threshold to 100 kV, matching its threshold with PJM.

“Most of the existing tie lines between MISO and SPP are less than 230 kV,” Lopez added.

MISO’s Tariff does not currently define regional cost allocation for sub-345-kV economic projects with PJM (although a plan is due in October in response to a FERC directive) and still requires economic projects with SPP to be at least 345 kV to be eligible for regional cost-sharing. The Tariff also doesn’t address sub-345-kV interregional projects located wholly outside of the RTO.

More Cost Allocation Zones

Other stakeholders at the meeting called on MISO to provide more detailed benefit metrics regarding a plan to further refine and shrink its existing cost allocation zones, which are currently based on the historic grouping of transmission pricing zones by state jurisdiction. They are nearly identical to the 10 local resource zones used in the annual capacity auction, although MISO this year won FERC approval to carve out an 11th zone in Texas for more specific cost allocation for the impending 500-kV Hartburg-Sabine project, the RTO’s only competitively bid transmission project this year. (See MISO Board Approves Texas Competitive Tx Project.)

MISO staff stressed they haven’t established a position on rearranging existing transmission pricing zones or valuing new benefit criteria. Discussions on the new cost allocation plan will continue through fall.