By Amanda Durish Cook

FERC on Tuesday approved a joint MISO–PJM proposal to create a new category of small interregional transmission projects intended to address historical congestion along the RTOs’ seams.

But the commission’s decision, which clears a path for developing five proposed interregional projects, was conditioned on the RTOs providing their stakeholders with more details about the decisions behind selecting so-called target market efficiency projects (TMEPs) (ER17-718).

In a related order, the commission also approved MISO’s plan for allocating TMEP costs within its footprint (ER17-2246).

‘Meaningful Role’

FERC staff, in absence of a commission quorum, tentatively approved the TMEP project type in late June. (See FERC Tentatively OKs New MISO-PJM Project Type.) While the commission on Tuesday found the RTOs’ joint operating agreement language creating TMEPs to be mostly consistent with transparency principles in FERC Order 890, their ruling pointed to one missing detail: It did not spell out that stakeholders would “receive a sufficient explanation” about why the RTOs would recommend — or not recommend — a proposed TMEP to their respective boards.

“We find that stakeholders must have this information in order to play a meaningful role in the TMEP planning process and to allow them to monitor and provide feedback on how MISO and PJM are planning transmission projects to alleviate the congestion that is the subject of a TMEP study,” the commission wrote. “Failure to present this information to stakeholders may lead to more frequent after-the-fact disputes regarding the TMEP planning process.”

The commission ordered both RTOs to revise the JOA to show they will provide their Interregional Planning Stakeholder Advisory Committee with supporting explanations behind decisions whether or not to: (1) evaluate a potential TMEP that could economically relieve congestion at a particular flowgate; and (2) recommend an evaluated TMEP to their respective boards. The revision also must include a promise to disclose to stakeholders “any additional criteria used to evaluate potential TMEP solutions.”

MISO TMEP Cost Allocation Approved

The commission on Tuesday also approved MISO’s plan to internally allocate its share of TMEP costs to transmission pricing zones based on their historical contribution to the market-to-market congestion relieved by the project. MISO’s cost allocation also establishes minimum benefit thresholds guaranteeing that no zone will be charged for benefits estimated to be either $5,000 or less, or less than 1% of MISO’s share of the project’s cost.

FERC also accepted a provision stating that, during the Entergy transition period of integrating into MISO, transmission pricing zones within MISO South will not be allocated costs for TMEPs that terminate in other MISO areas or wholly outside the RTO.

“We find that this proposed limitation is generally consistent with the proposal the commission accepted for allocating the costs of new transmission facilities within MISO during [MISO South’s] transition period,” the commission said. “Given the limited duration of the transition period, we conclude that [the] proposal will not prevent MISO’s share of the costs of TMEPs from being allocated in a manner that is at least roughly commensurate with the benefits.”

FERC has not yet ruled on PJM’s regional cost allocation plan submitted in April (ER17-1406).

TMEPs at the Ready

TMEPs are designed to address cost-effective and congestion-relieving seams projects that might otherwise be overlooked because of their low cost and small size. To qualify, projects must cost less than $20 million, be in-service within three years of approval and provide historical congestion relief that is equal to or greater than construction costs within the first four years of operation. Construction costs will be divided among MISO and PJM based on the percentage of congestion relief benefits.

Five such TMEPs have been sitting in the pipeline for the better part of a year, representing $17.25 million worth of upgrades. They expect the projects to deliver a 5.8:1 benefit-cost ratio and realize $100 million in benefits within four years of going into service. (See MISO-PJM TMEP Projects Drop to Five.) Both MISO and PJM plan to ask for respective board approval of TMEP candidates by the end of the year.

MISO-PJM Coordinated System Plan Produces One Project

Meanwhile, MISO and PJM will this month wrap up their two-year coordinated system plan, and they see potential for one interregional project under the more expensive traditional market efficiency project type.

Using their regional benefit criteria, the RTOs point to a new 30-mile, 138-kV line between Northern Indiana Public Service Co.’s Thayer and Morrison substations near the northern Indiana-Illinois border as the only potential interregional project to emerge from the study. NIPSCO expects the line to cost $42.5 million and be in-service by December 2022. If approved, MISO and PJM will split interregional costs based on each RTO’s benefit share and determine a regional allocation.

MISO is eyeing a June 2018 board recommendation for its portion of the project, as it doesn’t yet have in place a cost allocation method for sub-345-kV interregional projects. The RTO said it is “open to additional cost allocation methodologies” and is close to completing a study on a preferred regional cost allocation approach for the projects. For now, MISO has suggested allocating 100% of regional project costs to benefiting local resource zones or transmission pricing zones. MISO hopes to make a regional cost allocation filing with FERC in March 2018.