A month after filing a cost-allocation method for its long-range projects, MISO is on the hunt for a better approach to funding major transmission builds.

During a cost-allocation committee meeting Monday, the RTO opened the floor to stakeholder input on a new funding mechanism for the next round of long-range projects.

Staff have repeatedly said the separate-but-equal postage stamp rate divided between MISO Midwest and MISO South is meant to be temporary. The RTO has filed for FERC approval to use that design for the first two collections of projects from its long-range plan. (See MISO Finalizes Long-range Tx Cost Sharing Plan.)

MISO’s Jeremiah Doner said the grid operator is committed to applying a more permanent, “granular” cost allocation for future long-range projects.

“We want to have something with longevity in place,” Doner told stakeholders during the meeting.

Michigan Public Service Commissioner Dan Scripps, who chaired the committee, said the discussion on additional benefit metrics and quantifying them will continue well into 2023.

MISO envisions a new cost allocation for the third and fourth cycles of its multiyear long-range transmission plan. The planning will occur in four parts, with the first two focusing on the RTO’s Midwestern footprint and more immediate needs. (See MISO Long-range Tx Plan Overlaps with SPP Study.)

The third planning cycle will include transmission needs in MISO South. The fourth and final cycle will include MISO’s Midwest and South regions and solutions to increase transfer capability between the subregions.

The RTO will complete its first cycle of long-range projects in June and begin studying prospective projects in the second cycle in late spring or summer.

“We’re going to have to spend some time on what granularity means from a benefits perspective,” Doner said of cost-allocation talks for the third and fourth project batches.

He predicted that defining new reliability benefits will probably be most challenging. He said it’s easy to define reliability that satisfies NERC requirements, but it’s harder to pin down reliability that benefits regions, hardens the grid and leaves the system better positioned for extreme weather events.

Some stakeholders asked how the RTO will reconcile different allocations in the two halves of the long-range planning effort. Staff said cost-allocation methods morph over time.

“It’s a fair question. It’s a little hard to answer that from where we sit today,” Doner said.

Stakeholders are already advocating for a wider range of benefits in a new allocation design.

“If we’re really going to have a more granular cost allocation in place, we need to quantify more benefits,” Sustainable FERC Project’s Lauren Azar said. “As we’ve said ad nauseum, our current benefit metrics only identify a narrow slice of the benefits. So, there are a lot of free riders on our system.”

Currently, long-range cost allocation project benefits must 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.

Several stakeholders said transfer capability could be a good resilience measure because the ability to flow power has been crucial during past winter storms. They also revived the debate on whether new generation should bear a portion of new transmission costs.

MISO will hold another cost-allocation workshop April 26.

“We’ve got some work ahead of us,” Scripps said, closing the meeting.