By Amanda Durish Cook

DES MOINES, Iowa — MISO and SPP are making earnest efforts to coordinate transmission development along their shared seam, but much more remains to be done to manage an impending influx of renewable resources, regulators and industry participants said Monday.

And time is of the essence for making needed changes, according to some of the experts participating on a panel devoted to addressing shortcomings in the MISO-SPP interregional process at this year’s Mid-America Regulatory Conference (MARC).

The panel marked the first time that MISO and SPP representatives appeared together on a stage to express support the creation of a smaller, interregional project category such as the MISO-PJM targeted market efficiency project (TMEP). (See MISO, SPP Mulling Small Interregional Project Type and MISO, PJM Endorsing 2 TMEPs for Year-end Approval.)

MISO Director of Seams Coordination Jeremiah Doner said that MISO-SPP interregional projects — currently elusive — will become essential as more variable generation comes online. A larger transmission network is more beneficial because it can draw on more types of resources to firm up supply, he said.

“The bigger region you have to manage, that need for flexibility is going to be key,” Doner said.

MISO is eager to begin working with SPP to create a TMEP project template, he said.

“We don’t just want to take [the] PJM [TMEP model] and copy and paste it,” Doner said, although he added MISO has gained valuable experience through two rounds of TMEPs with its eastern neighbor.

SPP Director of Seams and Market Design David Kelley said his RTO would also like to develop something akin to TMEPs with MISO.

“We’ve seen the success between PJM and MISO. We’re very interested in getting a process like that in place,” Kelley said, adding that the idea must still be advanced through MISO’s and SPP’s separate stakeholder processes.

Missouri Public Service Commissioner Daniel Hall spoke about the recent endorsement by the Organization of MISO States and the SPP Regional State Committee to engage the RTOs’ monitors to conduct joint studies on seams issues. (See RSC, OMS Approve Monitors’ Seams Study.)

“There was a growing problem, and the problem is two RTOs run their grids independent of one another,” Hall said in explaining the need for the effort. “There are fundamental differences between MISO’s and SPP’s management styles: On the MISO side it’s, ‘If it’s built, use it.’ On the SPP side, it’s, ‘If it’s ours, you pay us.’”

Hall also noted that the RTOs’ executives don’t always agree: “I think those philosophical differences get overplayed, but they still exist.”

Neither OMS nor the RSC are under any illusion that they can force the RTOs to adopt new interregional planning processes, he said.

“We certainly feel that we have some ability to move the ball forward,” Hall said. He also pointed out that outgoing FERC Commissioner Cheryl LaFleur, who has been following the cooperation effort, will be replaced by Commissioner Richard Glick. (See MISO, SPP States Ponder Look at Interregional Planning.)

No Time for Perfection

Invenergy Director of Regulatory Affairs Nicole Luckey said the RTOs’ current process is encumbered by voltage and cost thresholds that are no longer appropriate and an interregional planning approach that has “too many cooks in the kitchen,” preventing cross-border transmission projects that could deliver low-cost wind energy.

“We have a [joint operating agreement] that’s way too prescriptive,” she said. “If I were a regulator, I would be pissed that my customers weren’t getting access to the lowest-cost generation in the country.”

However, Luckey also acknowledged MISO’s recent failed proposal to lower voltages on interregional projects to 230 kV for regional cost allocation, calling the filing a good start. (See MISO Allocation Plan Fails on Local Project Treatment.)

“I do think we’re much too prescriptive in what we look at” for projects, Kelley allowed. He said simply sizing up projects based on adjusted production costs makes less sense as the marginal cost of renewable energy approaches zero.

Kelley expressed hope about changes, saying SPP would work to identify and remove barriers. But he also contended the two RTOs were unlikely to reach total transmission planning consensus without a national energy policy and “leadership on a national scale.”

“And I would argue we’d all be dead before we get federal energy policy,” Luckey said.

Hall said it’s not well understood that the cost of congestion on RTO seams is socialized among ratepayers situated far from those seams.

“Even if you’re not on a seam, your ratepayers are paying for congestion. … That has to be acknowledged,” Hall told attendees. “The more [efficiently] the entire grid works, it serves as a benefit. It’s not just a function of bringing cheap energy to market; it’s moving it around in the most efficient way.”

“You can’t look at just whether your state is going to benefit,” Luckey told regulators.

Hall said the dearth of interregional projects is best illustrated by Ameren Missouri’s proposed northwest Missouri wind farm, which originally had a $10 million interconnection price tag that later escalated to $40 million because of needed transmission upgrades. Ameren recently scrapped plans for the 157-MW project because of sticker shock.

“And the reason was all of the congestion in the area,” Hall said. He said the Ameren wind farm was a “poster child” for the lack of interregional transmission planning.

“We cannot build transmission plans interconnection upgrade by interconnection upgrade,” Hall said.

MISO and SPP have so far undertaken three 18-month coordinated system plan (CSP) studies — in 2014, 2016 and 2019. The first two CSPs failed to identify a worthwhile interregional seams project, and early indications are that the most recent hasn’t identified a contender either. The 2019 CSP relied on only the RTOs’ respective regional models, removing the additional joint model.

“I’m going to take a little shot at MISO, but I warned Jeremiah [Doner], so he knows it’s coming,” Luckey said before criticizing what she called the RTO’s “old, stale” planning assumptions in its annual Transmission Expansion Plan (MTEP). MISO is dramatically underestimating the amount of renewable penetration in its four future scenarios used to inform MTEP, she contended, especially considering carbon-reduction pledges by Midwestern utilities.

“No comment,” Doner joked, although he addressed the criticism by noting MISO is seeking to rework its futures for the 2021 MTEP cycle.

Luckey said “massive” energy infrastructure upgrades are needed, and they can’t wait until MISO can “perfectly forecast” renewable penetration.