MISO said it will likely draw on a decade-old cost allocation method for its long-range transmission plan — at least in the Midwest.

The grid operator proposed using the cost allocation of 2011’s Multi-Value Projects (MVPs), with some departures, during a stakeholder cost allocation teleconference Wednesday.

The costs of MVPs were recovered through a 100% uniform, “postage stamp” rate from load. While the method would apply to long-range projects in MISO Midwest, the grid operator is holding off on proposing a method for projects in MISO South.

“Once we took a step back, we saw a lot of parallels with the Multi-Value Project type,” MISO planner Jeremiah Doner told stakeholders.

Doner said the method’s emphasis on congestion relief, reliability, energy policy goals and economics fits well with the aims of the current long-range plan, even 10 years later.

“We also heard that we should try to leverage what’s already in our tariff. This [allocation] has gone through a lengthy stakeholder process and FERC approval. So instead of coming up with a completely new project type, let’s look at the Multi-Value Project and see what needs to be changed,” he said.

The RTO intends to maintain the MVPs’ 100-kV minimum voltage threshold and $20 million cost minimum. To qualify for recovery, the grid operator proposed that long-range transmission projects meet the MVP criteria of supporting state or federal energy policies; addressing NERC issues and showing reliability benefits across multiple zones; and demonstrating multiple types of economic value across multiple pricing zones with at least an overall 1:1 benefit-to-cost ratio over the first 20 years of service.

Reviving the MVP methodology also means MISO might consider evaluating projects in groupings, though it’s not certain yet that it will advance portfolios of projects for approval in annual transmission cycles. The RTO has yet to announce any specific projects under the long-range transmission plan.

The postage stamp rate will likely be calculated based on local balancing authorities’ monthly net actual energy withdrawals and follow a 40-year depreciation schedule with operations and maintenance costs thereafter for projects.

Doner said MISO would not enact a systemwide postage stamp rate and instead opt for a subregional rate. “We would define MISO as the MISO Midwest and MISO South subregions” for the purposes of allocation.

The Environmental Groups sector and some MISO transmission owners last month advocated for a subregional postage stamp methodology. (See MISO Members Revive Debate over ‘Postage Stamp’ Cost Allocation.)

Different Treatment for MISO South

Exactly how South transmission projects would be allocated on a subregional basis remains up in the air.

“At this point in time, we’re not ready to make a recommendation on how to allocate costs in the South,” Doner said.

MISO South regulators in July voiced opposition to long-term planning. (See South Regulators Lambast MISO Long-term Tx Planning.) The grid operator is hoping for majority support among its states’ regulatory bodies on its long-range plan.

Stakeholders registered concern that MISO South might get special treatment through a different cost allocation method. Some pointed out that a few areas in MISO Midwest have limited transfer capability, similar to the Midwest-South subregional constraint, but will nevertheless share in a Midwest postage stamp rate.

“If MISO South comes up with a different cost allocation scheme … then are we basically suggesting that customers’ in the Midwest … benefits are going to be viewed differently? Can you help me understand how that would pass the fairness test, the equity test?” energy consultant Kavita Maini asked.

Maini said the fairness question will be particularly important for members who own facilities in both regions.

Doner said the question was fair, and the RTO would have more information when it proposes a specific cost allocation for MISO South.

“To the extent that the cost allocation differs, the rationale for that is going to be important,” he said.

Clean Grid Alliance’s Natalie McIntire said she was troubled that MISO has not yet proposed an allocation method for the South.

North Dakota Public Service Commissioner Julie Fedorchak urged MISO to build stronger business cases and show more proof of heightened reliability to sell the dramatic transmission expansion. “I need more than this to sign my ratepayers on to 40 years of costs,” she said.

Fedorchak said there needs to be clarification on what qualifies as a long-term transmission project, otherwise “anything could be labeled a long-range project” and cost-shared regionally.

Doner said MISO will build business cases as projects emerge, including demonstrating future NERC violations without them. MISO has already said that voltage and thermal issue will proliferate in the Midwest footprint without major transmission construction. (See MISO Analyses Show Reliability Woes Without Transmission Builds.)

The Union of Concern Scientists’ Sam Gomberg said that while he understands the concerns around protecting consumers from wasteful spending, he said he’s confident that MISO would present clear business cases as staff begin to analyze specific transmission solutions.

“Our world is changing so fast that we can’t wait on a perfect process. If we wait — I don’t want to say we will be left in the dark, because that would be too literal — but we’ll be behind the eight-ball,” Sustainable FERC Project attorney Lauren Azar said. She said if members wait any longer, there will be a scramble to build infrastructure.

Azar urged stakeholders to look no further than the 2011 MVP portfolio, whose benefits increased over time and even stabilized the grid as February’s winter storm lashed the footprint.

“They brought benefits that were never considered in the benefit analysis or the triennial reviews,” she said.

WPPI Energy’s Steve Leovy said that while he agrees with broad cost sharing, he hoped to see an allocation plan where MISO assigns a portion of costs to interconnecting generators.

“It’s imperative that generations see the cost impacts of their siting decisions,” Leovy said. “This is a big undertaking. We shouldn’t really on existing mechanisms to allocate costs.”

WEC Energy Group’s Chris Plante also asked that MISO modify the MVP methodology to include elements of its shared network upgrades so that generators share cost burdens.

“The long-range transmission plan is not an interconnection study. It’s a broad, regional system needs study,” McIntire countered.

Azar said the long-range plan contemplates the “total transformation” of the industry over the next two decades, including retirements, electrification and utility goals.

“Just placing this on the back of the generators is not the thing to do,” Azar argued.