By Amanda Durish Cook

CARMEL, Ind. — Tim Horger, manager of interregional coordination at PJM, said last week that MISO and PJM have agreed not to publicly talk about the issue of pseudo-tie congestion double-counting until a FERC complaint on the issue is resolved.

Some stakeholders were frustrated with the gag order curbing work on fixing the double-counting, reasoning that if the RTOs used ongoing litigation as a silencing factor, then it could be argued that even capacity could not be discussed.

Tilton Energy, the owner of a 180-MW natural gas generator in Eastern Illinois, filed the complaint in August, arguing that MISO is violating its Tariff by assessing congestion and scheduling fees on Tilton’s pseudo-tie transactions that have already been assessed by PJM (EL16-108).

“At least as early as February 2016, MISO and PJM have been aware of, and discussed at JCM [Joint and Common Market] meetings, the potential that generation pseudo-tied from MISO to PJM may be assessed duplicative congestion costs when market-to-market constraints bind simultaneously in both markets,” Tilton said. “While the JCM stakeholder process grinds on, generators pseudo-tied from MISO to PJM — such as Tilton — are suffering charges for congestion and scheduling fees by both RTOs.”

MISO asked FERC to dismiss the complaint on Sept. 26, insisting the charges are consistent with its Tariff and that Tilton has failed to show the Tariff is unjust and unreasonable. Horger said the “proceeding potentially could affect how the pseudo-ties are treated.”

Interface Pricing

While mum on the double-counting issue, the two RTOs said they plan to pursue what they call a collaborative approach for interface pricing in time for the beginning of the 2017 financial transmission rights planning year beginning June 1. The approach relies on PJM’s existing 10-bus definition for the common interface definition. It also allows the RTOs’ market entitlement-based limits — calculated using firm flow entitlement estimates in the day-ahead and FTR markets — to be modified as needed to reflect a transaction’s impact on a constraint. MISO had been backing a centroid-to-centroid approach. (See “No Consensus on Interface Pricing,” MISO/PJM Joint and Common Market Meeting Briefs.)

Beibei Li of MISO’s market evaluation and design team said MISO and PJM officials have been holding regular conferences to discuss how the RTOs should handle post-implementation standards, monitoring and metrics.

Horger said MISO and PJM’s efforts to revise pseudo-tie processes are being done in “parallel,” even though PJM recently failed to elevate any pseudo-tie rule changes for stakeholder consideration. PJM staff had developed one improvement package, while three PJM stakeholders each submitted their own; all were rejected. (See “Underperformance Changes Would Weaken CP, Says PJM, Monitor,” No End in Sight for PJM Capacity Market Changes.)

MISO, meanwhile, is readying a filing to amend its Tariff and Business Practices Manual and create a new agreement requirement between all parties involved in the creation of a new pseudo-tie. The updated requirements will tighten transmission service obligations and subject new pseudo-ties to system impact studies. (See MISO Readies Updated Pseudo-Tie Rules.) MISO and PJM currently have 31 pseudo-ties totaling 2,100 MW.

Freeze Date Future in Buckets?

PJM and MISO are contemplating a three-step “bucket” approach to replace the current 2004 freeze date reference point used to determine firm rights on flowgates in the allocation process based on flows before current markets were instituted.

Horger said MISO and PJM are looking at dividing flowgate allocations into separate tranches. The first would be for active designated network resources predating the current April 1, 2004, freeze date and historic transmission service requests. A second tranche would be for active designated network resources and transmission service requests after 2004. The third tranche would allow for entitlements to be granted for limited market-based transfers within the RTO balancing authority.

The first bucket would get first consideration for flowgate needs; excess allocations will be returned to the owner of the flowgate. Horger said the proposal showed consistency from the old approach to the new one, with new designated network resources joining the post-2004 bucket.

ITC Holdings’ Ray Kershaw observed that the three-step allocation method would result in “winners and losers.”

“There’s going to be winners and losers in any change, but we’re trying to minimize those impacts,” Horger replied. “I think we all agree that this needs to be updated. The system is planned a lot different than it was in 2004.”

The two RTOs will develop a straw proposal that will be unveiled at the next JCM meeting on Feb. 28 at PJM’s Conference and Training Center. MISO’s Ron Arness admitted that the RTOs have yet to develop many of the proposal’s particulars. “We don’t have the details … the purpose was to start thinking about these complicated topics,” Arness told stakeholders. Arness said freeze date concerns could be voiced through MISO’s Seams Management Working Group.

Horger also said it’s unlikely that an alternative will be implemented by the targeted June deadline.