A working group of MISO and SPP state regulators addressing rate pancaking issues agreed Monday that their work is finished and ready to be turned in to the Seams Liaison Committee (SLC).

Marcus Hawkins, executive director of the Organization of MISO States, said during a virtual meeting that the Rate Pancaking Working Group’s (RPWG) strawman has been tweaked since its initial draft. It includes four recommendations for the SLC’s consideration, or “next steps … you all could consider to further this work,” he said.

The working group identified the treatment of unreserved use charges for transmission configuration changes and emergency ties on the seam as its key issue. It suggested the SLC request both RTOs develop comparable treatment of unreserved use with criteria that is simple, fair and easy to administer, and to also comparably treat the billing of firm network reservations.

The RPWG also looked at the inability of market participants to obtain congestion hedges for firm transmission procurement. The group suggested the RTOs explain to regulators how firm transmission reservations should be obtained and the issues that prevent awarding hedges for firm service customers. The RPWG proposed asking stakeholders to share their experiences with procuring financial transmission rights and whether it affected resource procurement, and to monitor SPP’s work on counterflow optimization.  

The grid operator has scheduled a virtual workshop Aug. 30 to discuss adding counterflow optimization to its market mechanism that hedges load against congestion charges. SPP and its stakeholders have been unable to reach consensus on the initiative, which began in 2019. The RTO still hopes to bring a solution to the October board meeting. (See “Counterflow Optimization not Dead Yet,” SPP Board of Directors/Markets Committee Briefs: April 26, 2022.)

The RPWG’s other findings and recommendations included:

• Investigate how rate pancaking can be eliminated or reduced for long-term contracts, beginning with consideration during the Nov. 9 Common Seams Initiative joint stakeholder meeting of a long-term interregional rate that can reduce pancaking costs and increase revenue generated. The group suggested hearing from SPP on its rate-pancaking initiative and from MISO on whether it has any strategic actions related to the seams, and to request the RTOs assess different ways to adjust rates on the seams and increases transmission service sales.
• Determine how interregional projects can cause unintended pancaking issues. The group advocated that during the next SLC meeting, the grid operators describe how the projects could change flows on the system and corresponding charges for load that didn’t exist before.

The SLC formed the RPWG to inventory rate pancaking along the grid operators’ seams. The group surveyed staff and stakeholders in developing their recommendations.