Cost allocation negotiations for the second half of MISO’s long-range transmission planning process heated up this week over whether interconnecting generators should bear a portion of project costs.
At a Tuesday meeting of MISO’s cost allocation stakeholder group, staff said the RTO is leaning toward ruling out a “generator pays” element in its long-range transmission cost allocation.
Jeremiah Doner, MISO director of economic and policy planning, said the RTO prefers keeping transmission cost allocation to load separate from network upgrades to interconnection customers. Several stakeholders at the meeting asked MISO to reconsider devising cost assignments for interconnecting generators in order to pay for long-range transmission projects.
MISO is currently designing a different cost allocation to apply to the third and fourth cycles of its multiyear long-range transmission plan. (See MISO Seeking New Tx Cost Allocation for Major Buildout.) The grid operator hopes to have a new allocation in place by the end of next year, though some stakeholders hope it can finish earlier than that.
The long-range planning is occurring in four parts, with the first two focusing on the RTO’s Midwestern footprint and more immediate needs. The third cycle will include transmission needs in MISO South, while the fourth will include both the Midwest and South and solutions to increase transfer capability between them. MISO has so far studied and recommended $10 billion worth of projects for the first phase of the plan. (See MISO Focuses Stakeholders on $10B LRTP Projects.)
Sustainable FERC Project attorney Lauren Azar said implementing a generator-pays model will introduce a host of complex issues.
Clean Grid Alliance’s Natalie McIntire said that if MISO plans to allocate transmission costs to generation, it must also “slice and dice” its current process for assigning interconnection upgrade costs. She also said that if generators take on transmission costs based on how it benefits them, the RTO should also consider compensating generators for the contributions they provide, including reliability and furthering carbon reductions.
“There’s two sides to these questions about generator benefits,” McIntire said.
Doner said generation trying to clear the interconnection queue will still have network upgrade costs even after long-range projects are built, though they will be comparatively cheaper than current costs. Doner pointed out that ultimately, transmission charges flow back to load.
Mississippi Public Service Commission counsel David Carr said he was in favor of exploring a “generator pays” percentage of cost sharing and said it seemed that clean energy nonprofits were trying to “shut down” the possibility. He also said that while load will ultimately pay, it’s a matter of “which load” will pay: “All load, or the load from generators that rely on the projects?”
Southern Renewable Energy Association Executive Director Simon Mahan said that existing generation will likely benefit from the long-range projects. He asked if stakeholders would want long-range project costs assigned to existing generation. Mahan also said assigning costs to generation on transmission projects that stand to increase MISO’s Midwest-South regional transfer constraint is bound to be complicated.
Some stakeholders asked that proponents of generator cost assignments come forward with proposals of how and when generation could be assessed and assigned transmission costs.
Entergy’s Yarrow Etheredge said that while the RTO didn’t seem receptive to exploring generator charges in transmission cost sharing, it’s possible for projects stemming from MISO and SPP’s Joint Targeted Interconnection Queue study. (See Now, the Hard Part: MISO, SPP Tackle JTIQ Cost Allocation.)
Recognizing that cost allocation will continue to feature heavily in stakeholder meetings, MISO announced that it’s assembling an internal cost allocation team. Current employee Milica Geissler is serving as team lead.
