By Amanda Durish Cook

FERC on Tuesday approved MISO’s proposed cost recovery schedules for its new category of smaller interregional transmission projects with PJM. The commission did not order any changes (ER18-867).

The commission said the tariff schedules for MISO and its transmission owners for recovery of costs on targeted market efficiency projects (TMEPs) is effective April 18.

FERC said the schedules “help to ensure that the transmission owners that construct TMEPs, whether located in MISO or PJM, will have the opportunity to recover the costs of doing so.”

The approved schedules assign MISO’s share of the project costs to all transmission pricing zones that receive a congestion contribution benefit from the project of at least $5,000 or 1% of the total share per zone. Any zones that don’t meet the $5,000/1% threshold would have their costs reallocated to the remaining zones that do. FERC approved MISO’s TMEP cost allocation methodology in October.

TMEPs are small interregional transmission projects meant to address historical congestion along MISO and PJM’s seams.

The RTOs’ boards approved the first TMEP portfolio last year, consisting of five congestion-relieving upgrades in Illinois, Indiana, Michigan and Ohio. The projects, which have individual $20 million cost caps, will coincidentally cost $20 million combined. On average, the projects’ costs will be allocated 69% to PJM and 31% to MISO based on projected benefits, which are expected to reach $100 million.

Regulators from MISO South challenged the recovery schedules, as they similarly challenged MISO’s regional cost allocation plan. The Arkansas, Louisiana, Mississippi and Texas public service commissions, and the New Orleans City Council, asked FERC to require MISO clarify that the TMEP schedules do not apply to South. They also wanted a commitment that MISO will create a new TMEP cost allocation methodology before the December expiration of the five-year transition period that limits cost-sharing in South.

FERC said the regulators’ requests were beyond the scope of the proceeding. The commission said last month in a separate docket that MISO has already committed to filing a new regional cost-sharing method for its share of TMEP costs after the transition period. (See Rehearing Denied on MISO South Cost Allocation.)

The Mississippi PSC had also argued for a four-year limit on TMEP cost recovery; FERC declined to order such a provision.

New TMEPs in 2019?

At an April 18 MISO Planning Advisory Committee meeting, Eric Thoms, manager of interregional planning and coordination, said MISO and PJM are evaluating the need for a new TMEP study this year.

Thoms said that MISO is leaning in favor of a study, as the RTOs have experienced about $500 million in congestion payments on more than 200 market-to-market flowgates from 2016 to 2017.

“All indications are at this point that it would be prudent to proceed with a TMEP study this year,” Thoms said.

By May, the RTOs will also make an announcement on whether they will begin a traditional two-year coordinated system plan study to identify more expensive seams projects. The RTOs have yet to approve a major seams transmission project under their interregional market efficiency project category.