Divisions between MISO South regulatory staff and stakeholders deepened last week over the RTO’s long-range transmission plan.

MISO’s southern entities clashed with environmentalists and transmission owners over cost allocation and the future resource assumptions behind the long-range plan. Stakeholders are increasingly accusing Entergy (NYSE:ETR) and its regulators of trying to impede the planning process for anti-competitive reasons. (See MISO Stakeholders Blame Entergy for Long-range Transmission Impasse.)

Separate but Equal Allocations 

Under increased pressure from stakeholders who say it hasn’t done enough regional planning, MISO called for separate but equal allocation methods for its South and Midwest regions.

MISO on Thursday prescribed using 2011’s Multi-Value Project (MVP) cost allocation for both regions, eschewing Entergy and South regulators’ ask for distinct allocations. (See MISO Stakeholders: Separate Allocations Isolate Regions.)

However, MISO said the recovery of project costs will likely be confined to separate portfolios. Some stakeholders said confining the costs of projects to a subregion ignores that project benefits could cross boundaries and disincentivizes ever building more transfer capability between the regions.

MISO proposed to recover the cost of long-range projects from members using the MVP’s 100% uniform, “postage stamp” rate from load if the projects either support state or federal energy policies; address NERC issues and show reliability benefits across multiple zones; and demonstrate 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. The long-range projects must have at least a 100-kV rating and $20 million cost minimum.

Entergy and MISO South regulators, on the other hand, wanted a different allocation that assigns costs directly to project beneficiaries from either increased reliability, economic gains or attained policy goals. They also asked for a 1.25:1 benefit-to-cost ratio and 230-kV minimum voltage thresholds.

“The idea is to keep the project type criteria the same across the footprint,” MISO Director of Economic and Policy Planning Jeremiah Doner said at a cost allocation working group meeting Thursday. “We did say we were open to exploring reasonable regional differences … but we see a number of challenges with implementing the MISO South proposal.”

Doner said the proposal would essentially have the RTO performing two separate planning processes. He also said the proposal’s measure of reliability benefits only through the avoided costs of future reliability projects was too narrow and “doesn’t capture a broad type of reliability benefits.”

“It would really add another layer of complexity and difficulty to the transmission planning processes,” Doner said. “It wouldn’t result in a ‘roughly commensurate, beneficiaries pay’ allocation.”

Doner also said there isn’t precedent at FERC for allowing separate cost allocations in a single RTO.

Some stakeholders want MISO to consider applying Entergy and MISO South regulators’ proposal throughout the entire footprint for long-term projects, forgoing the MVP-style allocation.

The Union of Concerned Scientists’ Sam Gomberg countered that that would severely stall any project development.

“I really see a vote for this as an end to systemwide transmission investments. It’s overly restrictive to what we’re going to be able to do to actually get steel into the ground,” Gomberg said.

“When you look at the cost allocation from Entergy — which that’s what this is — it makes it harder for projects to get built,” agreed Simon Mahan, executive director of the Southern Renewable Energy Association.

Mahan said that if someone proposed to reinforce the grid so the February blackouts in MISO South didn’t happen again, those transmission projects probably would not get approved under the narrow benefit definition. He also pointed out Entergy has never built a market efficiency project since joining the RTO. He questioned how the proposal would help MISO South supply reliable power as the resource mix evolves, weather events intensify and existing facilities age out.

“I just don’t see how this proposal will make reliability better here in the South,” he said. “We’ve still got people down here without power three weeks after Hurricane Ida.”

Otter Tail Power’s Stacy Hebert said the MVP portfolio has been shown to benefit MISO South and its cost allocation has withstood challenges at the U.S. Supreme Court level. She said a Midwest-South split between cost allocations begs the question why have the Midwest and South under the same RTO at all.

“We’re one RTO and should be treated as such,” Ameren’s Jeff Dodd said simply.  

“I would implore, beg or ask kindly that you not create a regional seam,” Missouri Public Service Commission economist Adam McKinnie agreed.

But Texas Public Utility Commission Market Economist Werner Roth said MISO’s stance was a flip-flop from its earlier position that it would be open to unique cost allocations between Midwest and South.

“It honestly feels like MISO … gave us this shiny object to look at for a few months,” he said.

MISO Executive Director of System Planning Aubrey Johnson said that after speaking with FERC staff and counsel, the RTO discovered different cost allocations pose “a higher hurdle” for commission acceptance.

Mississippi Public Service Commission attorney David Carr said the state was “disappointed” with MISO’s response to a different cost allocation for South and demanded a list of names at FERC that MISO staff have spoken to. Johnson said he couldn’t do that.

“I’m as frustrated with anyone about the mixed messages, but I think people are missing the bigger picture,” Xcel Energy’s Drew Siebenaler said. He said MISO shouldn’t allocate the costs of regionally beneficial projects differently based solely on physical location.

Lauren Azar, attorney for the Sustainable FERC Project, said MISO South’s proposal “would create a number of free riders and is inappropriate.”

“I also think very few projects would be approved under the MISO South cost allocation,” Azar said. She said FERC’s Order 1000 dictates one allocation method per project type, so it shouldn’t come as a surprise that FERC would frown upon a special MISO South allocation.

Azar said it’s disingenuous to assume that a project’s physical location is demonstrative of the benefits it provides. She said the interconnectedness of the grid disproves that, with grid disturbances in Winnipeg felt as far south as Florida. Two allocations would effectively extend MISO South’s transition period, where it was exempted from regional cost allocation for the five years after it joined the RTO in 2013.

“MISO North is going to continue to be the full payer of the region’s reliability,” she said.

New Orleans-based clean energy consultant Andy Kowalczyk said he would like a list of the state regulators and Southern utilities that support Entergy and MISO South regulators’ allocation proposal. He said MISO South is not a “homogenous” bloc that’s uniformly on board with the plan, noting the New Orleans City Council’s recent letter to MISO pleading with it for transmission solutions. (See related story, Facing City Council Inquiry, Entergy Says it Could Sell New Orleans Utility Arm.)

“We shouldn’t be following something that results in no projects,” Kowalczyk said.

MISO could advance $30 billion or more in transmission expansion for board approval in March; so far it’s only set to propose projects located in MISO Midwest. (See MISO Targets March Approval for Long-term Tx Projects.)

Loud Row over Future Fleet Assumptions

A virtual workshop Friday on the long-range transmission plan devolved into a shouting match between Mississippi PSC consultant Bill Booth and other stakeholders. Booth was questioning MISO’s renewable penetration forecasts and their weighting in MISO South at length when several stakeholders interrupted him to tell him the matter was already settled.

Johnson said the estimates were built years ago into Future I of MISO’s transmission planning futures, and it was decided months ago that the RTO would use an unweighted Future I to identify the first possible solutions under the long-range transmission plan.

MISO will next move to the more progressive Futures II and III to identify more possible transmission projects. Some stakeholders pointed out that Future I contains the tamest of all MISO’s renewable predictions and is built on members’ own carbon-cutting plans, making it difficult to question.

“I want to commend MISO for their patience here. I also want to call out what is clearly an effort by Bill Booth to obfuscate and drive this conversation off the rails … and ultimately drive as many holes in the process as possible,” UCS’ Gomberg said. “I think it’s pretty obvious what is happening here. I would request MISO please take more control over this meeting.” He also asked that stakeholders refrain from “stupid” questions. Seconds later, he apologized for use of the adjective.

Multiple stakeholders said Booth should discuss his lingering concerns about the planning futures with MISO staff outside of the meeting instead of dominating several meetings in a row with repeat queries.

“I don’t think the purpose here is to hear out a minority of stakeholders a majority of the time. … There’s one group of stakeholders that is taking up all the oxygen in the room,” Kowalczyk said.

WEC Energy Group’s Chris Plante said he construed Gomberg’s and Kowalczyk’s comments as “threatening” and asked MISO to conduct a review of them pursuant to the Stakeholder Governance Guide.

Reliability Subcommittee Chair Ray McCausland offered his services as a neutral facilitator of the next long-range transmission workshop in October.