By Amanda Durish Cook

CARMEL, Ind. — MISO’s proposal to redesign its cost allocation process for market efficiency projects (MEPs) has encountered conflicting stakeholder feedback on how to allocate costs for lower-voltage interregional projects, stakeholders learned Wednesday.

The RTO is proposing to eliminate its footprint-wide postage stamp rate and lower its current 345-kV cost allocation threshold to cover 230-kV MEPs. Staff have said the change would capture a reality in which 230-kV lines are prevalent in the RTO’s footprint, especially in MISO South.

The proposal would also make cost sharing available to projects 100 kV and above along the PJM seam, respecting a 2016 FERC order requiring MISO to lower its voltage threshold to 100 kV for interregional projects with its eastern neighbor. (See Stakeholders Debate MISO Cost Allocation Plan.)

MISO is currently exploring a new option for MISO-SPP small interregional project cost allocation and plans to finalize the cost allocation proposal at the June Regional Expansion Criteria and Benefits Working Group (RECBWG) meeting.

MISO said stakeholders are split over whether it should extend the 100-kV threshold mandated by FERC for MISO-PJM projects to interregional projects with SPP. MISO had originally proposed that both PJM and SPP interregional projects would both be cost shared down to 100 kV.

When the RTO revealed interregional cost allocation details in March, some stakeholders urged it to adopt a consistent 100-kV threshold for internal and interregional projects.

MISO Planning Coordinator Davey Lopez told the RECBWG that stakeholder differences over the issue has prompted the RTO to consider applying a local allocation to SPP interregional projects between 100 kV and 230 kV and a regional allocation to shared projects above those levels.

ITC Holdings’ Cynthia Crane asked why MISO is proposing two distinct interregional allocations based on RTO.

“Some said, ‘well, the seams are different.’ They don’t have to have the same allocation rule,” Lopez said during a May 16 RECBWG meeting.

Missouri Public Service Commission economist Adam McKinnie asked what is significantly different between the PJM and SPP seams.

“I’m not sure that we see something inherently different. We’re just laying out a different option based on stakeholder feedback,” Lopez said.

FERC’s order requires MISO to file an allocation plan for cost-shared interregional efficiency projects with PJM down to 100 kV by Oct. 31.

More Metrics

MISO also told the RECBWG that it is still exploring how to incorporate more benefit metrics into its MEP cost allocation.

The RTO currently uses a single metric, adjusted production cost savings, to determine transmission project cost responsibility among its cost allocation zones.

Director of Strategy Jesse Moser said MISO now seeks to include multiple metrics in the calculation, which will be summed and weighed against the RTO’s 1.25:1 benefit-to-cost ratio requirement to allocate costs on a proportional basis to allocation zones with net positive benefits.

MISO is currently considering using avoided transmission investments as a new potential benefit metric, after obtaining agreement about avoided projects through a stakeholder review. The RTO will finalize more detailed metrics sometime in August.

New Sub-230-kV Category?

MISO is additionally considering a Tariff change that would create a new category of local economic transmission projects below 230 kV, Moser said. The small projects would have the same 1.25:1 benefit-to-cost ratio and benefit metrics as MEPs but cost allocated to the local zone. The new category would likely replace MISO’s current “Economic Other” transmission project category, which is not Tariff-defined and does not have a local cost allocation methodology.

WEC Energy Group’s Chris Plante expressed concern that the new project type could elicit FERC complaints if a lower-voltage project can demonstrate regional benefits but only has access to a local cost allocation.

Some stakeholders said MISO’s suggestion of the new project type provided further evidence for lowering the RTO’s regional MEP voltage threshold to 100 kV.

“This demonstrates that you’re willing to do the analysis on [sub-230-kV] projects,” LS Power’s Pat Hayes said.

Moser said MISO would have to review the project type for unintended consequences.

[Editor’s Note: An earlier version of this story incorrectly reported that MISO and the RECBWG intended to have a final draft of the MEP cost allocation proposal by May 16. The two plan to have a finalized cost allocation plan in June. ]