By Rich Heidorn Jr.

All but one of the organized markets under FERC jurisdiction have regions that show signs of transmission underinvestment, according to the commission’s first transmission metrics report.

FERC’s Office of Energy Policy and Innovation (OEPI) was tasked last year with collecting data to evaluate the impact of Order 1000 and other commission policies intended to encourage competition and infrastructure growth. The research also sought to determine whether regions have “appropriate levels” of transmission infrastructure. (See “Transmission Investment Metrics,” FERC Briefs.)

The staff report identified 13 areas — including every ISO and RTO under FERC jurisdiction except ISO-NE — in which there were persistent high or low prices, suggesting a lack of transmission was preventing load pockets from accessing cheaper generation. Some of the areas — including the Baltimore area and Delmarva Peninsula in PJM, North-Central MISO, the Chicago area, the Upper Peninsula of Michigan and Northern New York — have shown price separations for nine or 10 years.

The report also confirmed that Order 1000 has unleashed competition, with nonincumbent transmission developers submitting almost half of the proposals received by CAISO and PJM from 2013 through 2015. (Data was not available from other regions such as MISO and SPP, which are just beginning to open competitive windows.)

“One hope in issuing this report is that people will look at the assumptions we’ve made and provide feedback and perhaps ideas for additional metrics,” OEPI staffer Rahim Amerkhail said at the conclusion of a presentation to the commissioners at Thursday’s open meeting.

Below are the metrics and key conclusions:

Percentage of Nonincumbent Transmission Project Bids

Nonincumbents submitted 48% of all competitive transmission project proposals in CAISO’s and PJM’s regional planning processes from 2013 to 2015 (excluding a PJM window that closed last September, for which the RTO had not posted proposals). Nonincumbent proposals accounted for the majority of proposals in all three years in CAISO. In PJM, nonincumbents submitted the majority of proposals in 2013 and 2015, but less than 40% of proposals in 2014.

Staff identified incumbents as those making proposals in their own retail distribution service territory.

Load-Weighted Curtailment Frequency

Staff assumed that persistent congestion in an area suggests there is not enough available transfer capability to deliver power from the cheapest resources.

For RTO and ISO markets, staff looked at LMPs. For non-RTO/ISO market regions in the Eastern Interconnection, staff used NERC transmission loading relief (TLR) data. (Such data was not available for the Western Interconnection, which manages unscheduled flows with schedule curtailments and controllable devices such as phase shifting transformers.) Staff normalized the TLR data based on the region’s retail load.

The data found that SPP, MISO and the Tennessee Valley Authority had the highest levels of load-weighted TLRs.

Although MISO’s and SPP’s markets optimize dispatch based on congestion, reducing their internal use of TLRs, they use the procedure to manage unscheduled loop flows originating outside their footprints. “Both MISO and SPP have extensive borders with non-organized market areas, which may help explain their continuing use of TLRs,” staff said.

The data showed SPP’s TLR rate dropped after the RTO launched its day-ahead market in March 2014.

RTO/ISO Price Differential

This metric shows how long RTO/ISO market nodal price differentials have occurred persistently.

Staff looked at real-time prices at each load and generator point — focusing on the 95th and fifth percentiles of prices rather than maximum or minimum prices — then calculated market-wide average highs and lows to identify locations whose high or low prices were at least one standard deviation from the averages.

Staff found relatively high or low real-time LMPs occurred at 1,986 generator or load points from 2012 through 2014. Thirteen areas had differentials spanning at least three years.

Load-Weighted Transmission Investment

A third set of metrics, which compared transmission investment to load and project sizes, was designed to provide a longitudinal analysis comparing values before and after FERC policy changes took place.

Load-weighted transmission investment averaged more than $2/MWh of retail load over all regions from 2008 to 2014. The highest average investment was in the Texas Regional Entity, at more than $4/MWh across all years, reflecting the $5.7 billion spent in the state’s Competitive Renewable Energy Zone (CREZ), an initiative to alleviate congestion and integrate wind generation.

The smallest load-weighted investments were in the SERC Reliability Corp. and Florida Reliability Coordinating Council regions in the Southeast.

A related metric, load-weighted circuit-miles added, produced similar results.

Circuit-Miles per Million Dollars of Investment

The Midwest Reliability Organization added 1.7 circuit-miles of transmission per million dollars invested, the highest of any region, according to the report. PJM’s reliability region, Reliability First Corp., had the most expensive transmission with less than one circuit mile per $1 million spent. The average was 1.1 miles per $1 million.

The differences “may be due to a range of factors, including terrain, population density, and state policy choices, among others,” staff said.