MISO and SPP officially announced this week that they will not pursue any small, congestion-relieving interregional projects from their first Targeted Market Efficiency Project (TMEP) study.
The two grid operators have been hinting that they likely weren’t going to land on any beneficial projects. (See Search for Small SPP-MISO Interregional Projects May be Fruitless.)
SPP’s Neil Robertson said the constrained flowgates under study either already had a solution from SPP’s regional planning, resulted in projects with one-sided benefits, or the proposed projects were too costly for one RTO when compared to continued congestion payments.
Robertson said during an Interregional Planning Stakeholder Advisory Committee (IPSAC) teleconference Wednesday that the RTOs’ Joint Targeted Interconnection Queue (JTIQ) study stands to ease congestion on some of the TMEP candidate constraints. He said staffs assumed that the approximately $1 billion of JTIQ projects took precedence over potential TMEP projects. (See Stakeholders Not Sold on JTIQ Projects’ Cost-Sharing Plan.)
Robertson said the TMEP study contained multiple constraints where “other study processes got there first.”
“In this particular case, we’re a victim of timing and circumstance to some extent,” he said.
As an example, Robertson said a possible $37.7 million rebuild of a 50-mile ,161-kV line near the Oklahoma-Arkansas border would nearly double the TMEP cost cap of $20 million.
The grid operators screened for possible TMEPs when a market-to-market flowgate amassed $1 million or more in congestion costs over a two-year period. The two catalogued seven permanent flowgates that racked up between $10 million and $43 million worth of congestion. (See MISO, SPP Hunt for Small Interregional Tx Projects.)
This is the fifth straight time MISO and SPP have returned empty-handed after an interregional study.
Despite coming up empty, the RTOs are memorializing their TMEP process in their joint operating agreement and will launch another study in the future. They will also create separate regional cost-allocation methods to use when they find a beneficial project.
“I think [with] the fact that TMEPs will be a tool in the future, I think it’s inevitable that we will have multiple projects in the coming years,” Robertson predicted.
Advanced Power Alliance’s Steve Gaw said he was frustrated with the results. He said it seemed that MISO and SPP are hamstrung by siloed joint planning processes, perpetually promising projects “on the horizon” that never materialize.
“We’re still missing the mark here in terms of our interregional planning processes,” Clean Grid Alliance’s Natalie McIntire said.
The RTOs have proposed that TMEPs must cost $20 million or less, must not be greenfield projects, be in service by the third summer peak from their approval, and completely cover their installed capital cost within four years of service through avoided congestion.
They borrowed many of their standards from MISO and PJM’s TMEP criteria. Stakeholders on both sides of the seam have said the cost threshold should be increased, given today’s high inflation environment and tight labor market.
They asked how the RTOs settled on the TMEPs’ cost threshold. Some said the $20 million limit established by PJM and MISO in 2017 amounts to $30 million in 2022 dollars. Their staffs responded that the $20 million cap ensures that projects are low-risk, relatively easy to complete and don’t impede on other more intensive interregional planning.
During a November common seams initiative meeting between the two grid operators, McIntire said it would be a “tragedy” if they emerged from another interregional study without a single project recommendation.
MISO and SPP are continuing to determine how a transmission owner in one footprint can finance and construct lines in the neighboring RTO without benefits to the region where the transmission would be located.
Currently, the MISO-SPP operating agreement doesn’t contemplate construction of a cross-border project unless at least 5% of the project investment stands to benefit the neighboring region. The RTOs are attempting to chart a path where a TO can construct a project that solely benefits the RTO across the border.
