ST. PAUL, Minn. — MISO, SPP and intervenors in the dispute over MISO’s use of SPP transmission to deliver power between its northern and southern regions have begun circulating drafts of a settlement amid optimism that it will be filed with FERC in October (ER14-1174).

Discussions on how costs paid to SPP will be allocated within MISO will begin in September “on a separate track,” Eric Stephens, deputy general counsel, told members at the MISO Informational Forum last week. Stephens said confidentiality rules on the settlement talks prevented him from discussing specifics of the deal.

But Market Monitor David Patton told the Markets Committee of the Board of Directors later that the settlement will allow MISO to eliminate use of its $9.57/MWh “hurdle rate” in determining whether to allow more than 1,000 MW of power flows between its two regions.

“We need to make sure that’s the case, but I think the team at MISO did a good job of moving the settlement in a direction that allows us to do that,” Patton said.

MidAmerican Energy’s Dehn Stevens told the Board of Directors meeting later that the Transmission Owner sector is “very comfortable with where [the settlement is] at.”

Organization of MISO States President Libby Jacobs told the board that her group is “very optimistic that there’s resolution on the horizon.”

“OMS would encourage that to be rapidly finished so that everyone’s focus can be on other issues,” she said.

In spring 2014, MISO began limiting flows between its northern and southern regions after SPP complained that MISO breached their joint operating agreement by moving power over its transmission footprint in excess of a 1,000-MW contract path.

While seeking to resolve the dispute with SPP, MISO implemented a $9.57/MWh hurdle rate — an adder to the LMPs of the importing sub-region — to establish market signals indicating when the savings from avoided redispatch costs exceed SPP’s additional transmission charges.

Patton: Fear of FTR Gaming over WAPA Integration Hasn’t Materialized

Patton told the Markets Committee that his staff has seen little evidence to confirm fears that SPP’s integration of the Western Area Power Administration (WAPA) could give market participants an opportunity to game the market by buying financial transmission rights from SPP “whose value predictably would change significantly” following the integration.

“We didn’t see a lot of participants engage in strategic FTR purchases the way we had thought they would,” Patton said.

He said his staff is continuing to review how SPP’s dispatch including WAPA affects MISO’s constraints in the FTR market and market-to-market process.

“We don’t have significant concerns, but it is a significant change because WAPA stretches from the Dakotas down to the southern end of SPP. It’s a huge change in their configuration. You can think of it as similar to our integration of MISO South.”

“So, no red flags, just continued vigilance?” asked Director Michael Curran.

“Yes,” Patton replied.

— Rich Heidorn Jr.