MISO has commissioned a study meant to demonstrate that long-range transmission projects built in the Midwest won’t deliver benefits to the South.

The grid operator has tapped The Brattle Group to test its hypothesis that benefits from long-range projects built in either MISO Midwest or MISO South won’t cross its subregional transmission constraint. Brattle is using hypothetical and past projects from MISO’s 2011 Multi-Value Project portfolio to study a systemwide benefit spread.

The RTO plans to include the results in its FERC filing for a separate-but-equal postage stamp cost allocation that splits the system into MISO Midwest and MISO South for cost-recovery purposes. MISO hopes that the allocation will be temporary, and it plans to explore other long-range design options in 2022.

Speaking during a Dec. 3 Regional Expansion Criteria and Benefits Working Group, MISO’s Jeremiah Doner said staff will share the study report with stakeholders when it’s completed.

Some stakeholders asked whether MISO was deliberately creating a seam within its own borders with the first allocation design.

East Texas Electric Cooperative representative Paul Kelly said that some stakeholders already have performed analysis that show high-voltage, long-range transmission can deliver benefits systemwide despite the subregional transfer limit between the Midwest and South.

Stakeholders asked whether MISO would allow retroactive cost recovery in MISO South if Midwestern project benefits are shown to help the South and whether staff will again test for benefit flows once they finally recommend specific projects.

Currently, MISO won’t estimate how much the first group of recommended projects could cost. It has said its first transmission planning scenario shows a need for upwards of $30 billion worth of projects, but those are expected over multiple years.

“I just can’t help but ask … is there a plan in place if that scenario actually does show significant benefits to the South?” said Sam Gomberg of the Union of Concerned Scientists.  

MISO’s Aubrey Johnson said if study results show noteworthy benefits flowing to the South, staff would reopen cost-allocation discussions for the first Midwestern projects to emerge from the long-range transmission plan.

Johnson was asked whether MISO would then be unmoored on a singular cost-allocation design and propose allocation that could vary project-to-project or cycle-to-cycle. He said staff will not alter cost-allocation decisions once made but will use what it learns on benefits flowing Midwest to South to inform future allocation designs.

With the Brattle analysis, MISO once again delayed a FERC filing date for cost allocation, pushing it back from mid-December to mid-January. (See MISO Schedules Cost-allocation FERC Filing.)

The RTO’s long-range transmission plan has evolved meeting-to-meeting, with postponements and temporary reductions in scale announced near-monthly.

The grid operator first told stakeholders it would advance an initial subset of projects based on its most conservative 20-year transmission planning scenario with December’s approval of the 2021 MISO Transmission Expansion Plan. It then said it needed until March. Planners now say they won’t have project proposals ready for a board vote until late spring. (See MISO Postpones 1st Cycle of Long-range Projects.)

MISO is not tackling Southern projects until sometime in 2023, leaving MISO South transmission needs out of the study’s first cycle. Louisiana and Mississippi regulators have threatened to leave the grid operator if the first round of long-range projects’ cost allocation extends to their utilities’ ratepayers.

Stakeholders Tee Up 2022 Allocation Design Debate

Looking ahead to next year’s debates on long-range cost allocation, MISO South members and regulators resubmitted for consideration their allocation proposal first presented in the summer.

The plan prescribes costs be directly assigned to project beneficiaries from either increased reliability, economic gains, or attained policy goals. It would have only states with decarbonization goals splitting project costs that further their clean energy aims. (See Tensions Boil over MISO South Attitudes on Long-range Transmission Planning.)

Clean Grid Alliance’s Natalie McIntire said state goals that split transmission project costs are similar to MISO’s current participant-funded project type, where market participants can construct a project so long as it doesn’t harm the system. She said elements of the South proposal already are available as options in the MISO tariff.

Some stakeholders said the South proposal wouldn’t pass at FERC because it proposes different allocation types for a single project class.

MISO’s Environmental Sector countered the South proposal with a design that asks the RTO to incorporate all benefit metrics it has deemed acceptable, including improved public health from less pollutants. The sector also asked for a two-step cost assignment, with some costs assigned to the parties receiving quantifiable, economic benefits and the remainder spread evenly across a subregion to recognize the broad reliability benefits that high-voltage lines deliver but are difficult to calculate.

Sustainable FERC Project attorney Lauren Azar said the Environmental Sector’s proposal clamps down on free ridership. She said her sector would also like to see benefits assumed over a 40-year horizon, noting most transmission remains energized for about 60 years, making projects undervalued when their benefits are initially measured.

MISO has said its system will not be able to function reliably in a future with a changing resource mix without new, large transmission projects (See MISO Analyses Show Reliability Woes Without Transmission Builds.) Currently, more than 95% of its members have carbon-emissions reduction goals.

Both MISO South regulators and Entergy representatives have questioned the amount of renewable penetration the RTO forecasts in future planning scenarios. They have suggested states with clean-energy goals pay a larger share of transmission construction costs.

The grid operator said it may need more than a dozen 345-kV additions, a handful of 500 kV and 765 kV lines, and even a massive footprint-wide network of DC lines as part of its the long-range planning package. (See MISO Reveals Contentious Long-range Tx Project Map.)

Based on MISO’s annual MTEPs, the footprint could see more than 5,000 miles in new transmission lines come online over the next decade. Only about 200 miles of the new lines will be rated at 345-kV and greater.

MISO has not approved any large economic transmission projects since it changed their cost allocation in 2020. (See MISO Cost Allocation Plan Wins OK on 3rd Round.) The RTO had framed the new allocation as key to getting more Market Efficiency Projects approved.