By Amanda Durish Cook

MISO is probing what eligibility requirements it should establish before allowing electric storage resources to function as transmission assets.

The RTO is considering study processes, modeling, cost recovery and retirement rules, all raised with stakeholders during a special Aug. 17 Planning Advisory Committee conference call to discuss the issue.

MISO is leaning toward requiring a storage resource to complete the interconnection queue if it wishes to provide market services, regardless of whether a resource has already been approved as transmission through the annual Transmission Expansion Plan (MTEP).

The RTO has so far only connected storage to its system through its generator interconnection procedures, and the procedures do not contemplate electric storage resources as transmission assets, MISO Director of Planning Jeff Webb said.

“We have connected batteries recently through Attachment X. However, that process doesn’t contemplate these devices being solely used for transmission services or mixed services,” Webb said.

“One of the complaints for having them go through the queue is a timeline and compatibility process,” he said, explaining that a transmission-use storage resource would likely have to wait through a few MTEP cycles before it could become eligible through the interconnection process. The annual MTEP reliability modeling considers only generators already approved for interconnection, not future resources.

Webb said some storage owners might ask why their resource will have to undergo reliability studies as part of the interconnection queue when they’re already operational under the MTEP assessment.

“Would the subsequent interconnection process be superfluous? What function would it serve?” Webb asked rhetorically. “Maybe there’s a type of expedited interconnection. I don’t know.” He asked stakeholders for their ideas.

American Transmission Co.’s Bob McKee predicted that MISO will see many storage resources connecting under mixed-use market and transmission functions.

“To get the value out of that device, you’re going to use it for as many services as you can. I think we’re really going to have to make sure the process doesn’t impede the value for the customer.” He warned against completing separate assessments simply for the sake of following MISO’s current process.

Some stakeholders asked if it was a matter of treating all generation fairly as a matter of principle, or necessary to allowing storage’s possibly superior capabilities to compete in more than one area. Others said MISO may need to complete queue analyses with and without the presence of storage resources to find out whether storage as transmission is truly as reliable as traditional transmission.

Webb said MISO will likely make special modeling considerations for storage resources beyond traditional wires modeling.

“When we’re talking about wires or transformers or cap banks, those are available all day, every day to provide for any and all reliability issues or conditions on the grid that they can assist with. Storage as transmission would similarly be called upon by MISO to address any reliability issues they would be effective for,” Webb said.

He said storage as transmission in particular would have to be under some form of MISO control to make sure it is charged to perform its reliability functions over peak hours, for example. MISO plans to notify the resources when and at what charge state they will be needed to provide transmission reliability services and will provide enough time to ensure the resource can reach the necessary state of charge.

Webb said that if MISO chooses to defer a 40-year transmission project in favor of a storage solution, it must also gauge the anticipated life of a device for modeling, considering which major components will likely have to be replaced and when. He said MISO may find itself approving the original deferred transmission project if a storage asset doesn’t stand up over decades.

MISO must also decide how storage assets will recover costs so that customers don’t pay twice for the same services, Webb said, paying particular attention to the treatment of market revenues if either partial or full revenue requirements are recovered under cost-based transmission rates. Storage asset owners might decide to recover only a portion of transmission rates so the asset can compete with a cheaper wires solution, Webb said.

MISO is currently considering at least three approaches to cost recovery:

• Full cost-based recovery for transmission reliability services, with full crediting of market revenues;
• Partial cost-based recovery for transmission reliability services, calculated as asset cost minus asset owner-estimated market revenues with crediting proportional to cost-based revenue; or
• Partial cost-based recovery for transmission reliability services, calculated as asset cost minus asset owner-estimated market revenues with no crediting of market services revenues because the amount was estimated to be necessary to recover asset costs.

Storage resources would also likely have to be registered in the MISO market for charging and discharging, even if they are strictly treated as transmission, Webb said. The question also remains about what storage assets would pay and be paid for energy used for charging and discharging when they must operate for transmission system reliability under MISO instruction. Webb said in those cases, storage owners could either be price-takers in the market, charged and paid at LMPs for injections and withdrawals, or they could be neither paid nor charged for such injections and withdrawals. He also said MISO and stakeholders could come up with a third option for consideration.

The RTO is also looking to draft a storage-as-transmission retirement process, Webb said. Traditional wires assets are rarely decommissioned in the footprint, according to MISO, and Webb said storage resources may become subject to system support resource studies or an equivalent to discern whether the devices are necessary for reliability purposes.

Webb also said stakeholders raised an issue of MISO investigating whether there are possible conflicts of interest if a transmission owner is also allowed to become a market participant operating a storage resource for market services. However, Webb said MISO did not think the issue was markedly different than utility-owned generation participating in the market today.

MISO will continue to discuss policy for storage-as-transmission at the September PAC meeting. Webb asked for stakeholder suggestions through Sept. 7.