By Tom Kleckner
Nearing the end of the first year of market-to-market (M2M) operations, SPP and MISO are negotiating a set of “guiding principles” to improve the process and reduce congestion costs along their seams.
The M2M process was instituted last March to improve price convergence on flowgates along the seams. Under M2M situations, SPP and MISO compensate each other for re-dispatching generation that lessens congestion in a way that reduces overall costs.
“We’re not comfortable [M2M] has worked the way it should in all cases, and we think there’s room for improvement,” David Kelley, SPP’s director of interregional relations, told SPP’s Seams Steering Committee on Jan. 6, repeating a point he has made several times in recent months. “We’ve tentatively agreed upon certain things we believe can improve the process.”
The seven principles include excluding reciprocal coordinated flowgates from the M2M process based on a threshold test for generators that affect it; recalculating firm-flow entitlements (FFE) due to changes in facility ratings; capping FFEs to the system operating limits for M2M flowgates; and switching between market flow and total flow control modes during M2M events.
Kelley said SPP and MISO have been discussing the principles and negotiating on how best to make improvements for several months. Staff from the two RTOs met Friday to share feedback from their respective stakeholders on the guiding principles.
Work in Process
Two of the principles describe in what circumstances the RTOs would switch to market flow or total flow control mode. Kelley told the committee the RTOs are already using a market flow control mode, in which they only manage the transmission in their own markets, during M2M events on certain flowgates as a temporary solution. He said switching total flow control to the non-monitoring RTO — managing all of the transmission on that line or flowgate — will require software changes and revisions to their joint operating agreement. Capping FFEs would also require software updates and JOA revisions.
While the payment amounts between the two have decreased in recent months, abnormalities continue to crop up along the seams. (See M2M Process Shows Continued Improvement.) In November, a temporary flowgate in Minnesota recorded 139 hours in M2M, resulting in a $1.075 million payment from SPP to MISO.
“The principles don’t resolve all the issues in [M2M],” Kelley said, “but from SPP’s perspective, we think these are good improvements to make. We should move forward with them so we don’t see situations like the [Minnesota] transformer, where the process isn’t working.”
Committee Chair Paul Malone, of the Nebraska Public Power District, asked whether the RTOs would have been better off using transmission-loading relief procedures, such as cutting non-firm transmission during periods of congestion. Kelley responded they would have been “in some cases.”
‘Trigger’ Sought
Marguerite Wagner, director of RTO policy for ITC Holdings, called for a triggering mechanism that would send recurring congestion points into the transmission-planning process. “Whether it’s ‘X’ amount of dollars or frequency,” she said, “something to throw it over into the planning process.”
“I absolutely agree,” Kelley said. “I think you will see some activity around that this year.”
SPP and MISO will continue to hold JOA stakeholder meetings to discuss seams issues, but the frequency has been reduced from quarterly to biannual.
The steering committee also reviewed and discussed FERC’s Nov. 30 order, which rejected SPP’s proposal to create a new class of seams transmission projects (ER15-2705). (See FERC Rejects SPP Proposal for Seams Transmission Projects.)
FERC said the Tariff revisions did not go into enough detail about joint studies. The group decided to wait for FERC orders on regional and interregional cost allocations, expected in the spring, rather than rewrite the compliance filing.
New Members
The committee welcomed seven new members during its first meeting of the year: Wagner, Jim Jacoby (American Electric Power); Katy Onnen (Kansas City Power & Light); Jason Atwood (Northeast Texas Electric Cooperative); Steve Sanders (Western Area Power Administration-UGPR); Ray Bergmeier (Sunflower Electric Power Corporation); and Jordan Schmick (Xcel Energy).
With the additions, the committee is now composed of seven transmission-owning members and six transmission-using members, covering New Mexico up to Montana.
Ironically, AEP’s Richard Ross, who resigned from the committee last year, served as Jacoby’s proxy during its first meeting of the year. “I know, I know,” he said with a sigh during the roll call.
