By Amanda Durish Cook

NEW ORLEANS — At the Organization of MISO States’ annual meeting last week, where MISO-SPP seams needs took center stage, North Dakota Public Service Commissioner Julie Fedorchak set the tone by opening a panel with a pun.

“We’re bursting at the seams,” she said, then drummed a “ba-dum-tsh” beat on the podium.

American Wind Energy Association and Advanced Power Alliance’s Steve Gaw commended state regulators for bringing attention to the seam this year. He said the discussion has earned FERC’s attention and is stimulating action at the federal level.

“It’s immensely helpful to understanding the future and where we’re going,” he said during the Thursday meeting. “The bottom line is, if you don’t do robust planning, you won’t have the idea of where the needs are.”

“We’re not seeing the interregional planning process as effective as we’d like,” Clean Grid Alliance’s Natalie McIntire added.

MISO has never recommended an interregional project with SPP, while it’s close to embarking on its first major interregional transmission project with MISO, PJM Poised for 1st Major Interregional Project.)

But Entergy’s Charles Long said too little is known about future transmission use patterns to build a major MISO-SPP interregional project. He urged the RTOs to develop market-to-market efficiencies first.

“What really concerns me about the seams is the thinking that we need to build our way out of it. … Our big concern is that we would fund transmission that in five or 10 years won’t be useful,” Long said. “To make the assumption that every problem can be fixed by transmission is the wrong assumption. We’re getting to the point of diminishing returns on transmission.”

Long also argued that if electric vehicle adoption takes off, the distribution system will need upgrades and buildouts “far before” the transmission system will.

Long’s arguments reiterated those his company recently made in response to the MISO and SPP market monitors’ solicitation of stakeholder feedback on the interregional processes. (See related story, “Entergy Comment on Seams ‘Raises Eyebrows,’” MISO, SPP States Ponder Look at Interregional Planning.)

His arguments found traction with other panelists.

“You should eat your peas before you have dessert,” agreed NRG Energy’s Travis Kavulla. He encouraged RTOs and utilities to first make software upgrades and create “closer automation between two systems” before moving to “fancy new capital assets.”

Kavulla said the country’s regulatory framework is generally bad at forcing utilities to leverage their existing capital assets for more efficiencies.

But McIntire said the future is clear: more renewable generation.

“MISO says its greatest asset is its footprint diversity. And if that’s true, footprint diversity should extend to the seams to have this sort of mutual aid society,” McIntire said.

Long said it’s worth remembering that MISO and SPP have completed a lot of analysis already on possible seams projects.

“If you want the yardstick to be how many seams wires to go into the air, then you could say it’s slow. But I think you have to be careful in how you measure success. You need to measure twice and cut once,” Long said.

Gaw disagreed, saying the RTOs are moving too slowly, and with a flawed planning process that assumes some transmission projects will be ticked off through needed upgrades in their generation interconnection queues.

“You end up with something that generators have to pay for that benefits load. And because it’s so expensive, it doesn’t get built at all. Is that the kind of outcome we want?” Gaw asked.

Market Study Results Soon

OMS Executive Director Marcus Hawkins acknowledged “several” members of the RSC and thanked them for their attendance.

The first round of the groups’ seams studies focuses on rate pancaking and unreserved transmission use charges, the market-to-market process and the RTOs’ lack of joint dispatch in energy markets — all elements that might frustrate market efficiencies between the RTOs.

Both monitors have so far found limited benefits.

Last month, MISO Independent Market Monitor David Patton said he was encountering “a snag” preventing him from securing offer data from SPP in order to complete his side of the analysis. At Thursday’s meeting, Patton said he was still having “data issues.”

Another issue arose when the IMM requested confidential market participant information that, according to the SPP Tariff, can only be shared with permission of affected market participants. Patton since revised the data request to more limited information. SPP said it’s willing to perform an analysis of its own data under the direction of the IMM, if necessary.

SPP Market Monitor Unit Executive Director Keith Collins said he is examining rate pancaking and unreserved transmission use charges essentially functioning as taxes.

“Are the imposition of costs acting like taxes that are barriers, or are they acting like taxes that provide a societal good?” he said.

But so far, the costs seem too low to bother with.

Collins said MISO and SPP’s rate pancaking issues are moot because both RTOs offer heavily discounted, “near-zero-cost” spot-in transmission service for imports.

“The reality is that most of the rate pancaking has been addressed by market import spot-in service,” Collins said. “Because most non-firm import transactions are already exempt from transmission charges, there is little to no market efficiency to be gained by the further removal of the additional transmission service charges across all import transactions.”

Collins said there have been no unreserved use charges levied against MISO members by SPP in the past two-and-a-half years and only “minimal” charges from MISO to SPP in 2017 and 2018. He also said he’s aware the RTOs’ transmission customers take “cost-avoidance measures” so they aren’t charged for unreserved use.

Patton said a joint dispatch stands to drastically increase power imports from SPP to MISO with only “modest” production cost savings on both sides of the seam.

“These are initial results that are subject to be iterated and improved,” Patton caution. He also noted that the production cost models he uses represent a “highly idealized” version of the RTOs that doesn’t take into account all transmission constraints, “lumpy” outage planning and other operating realities.

Patton also welcomed more ideas on what the monitors should study. “If there are participants or states here that think there are issues that haven’t been looked at, please let us know,” he said.

McIntire said that while there might be few market efficiencies to be gained by their removal, pancaked rates present “a real barrier” to moving low-cost renewable energy across the seams. She also asked that the Monitors not rely solely on a 2018 model to conduct the study but make future assumptions.