By Amanda Durish Cook

FERC last week found that MISO and PJM have largely complied with commission directives issued in an order resolving a complaint by Northern Indiana Public Service Co. over interregional planning (EL13-88-001, et al.).

But the RTOs still face additional compliance filings to demonstrate better alignment of studies and cost allocation.

FERC last week accepted most of the joint operating agreement changes filed by the two RTOs and denied multiple requests for rehearing, including those from MISO and PJM themselves, as well as MISO transmission customers and NIPSCO.

The commission instead stuck to opinions issued last April. (See MISO, PJM Working to Comply with NIPSCO Order.)

At last week’s MISO-PJM Interregional Planning Stakeholder Advisory Committee meeting, transmission engineer Adam Solomon said the RTOs will conduct a legal review of the order and publicly post a summary and work plan next week.

Despite protests, FERC stood firm on its directive to scrap the previous triple benefit-to-cost ratio test, where projects had to meet a joint 1.25:1 ratio as well as the same calculation within each RTO.

The RTOs must now rely on a net value of the total benefits calculated for each RTO and are responsible for determining “whether the potential interregional economic transmission project meets its individual 1.25-to-1 benefit-to-cost threshold using each RTO’s share of the project’s total cost.”

Cost allocation is now based on each RTO’s pro rata share of the project’s total benefits. The commission rejected arguments by the RTOs and MISO transmission customers that an additional interregional benefit-to-cost analysis provides a “common” benefit metric to compare projects.

“Requiring MISO and PJM to each rely on their regional analysis to calculate both the benefits and costs of a potential interregional economic transmission project creates a more direct link between the costs allocated to each RTO and the benefits received,” FERC wrote.

FERC also found that a request by the RTOs to continue allocating costs of interregional transmission projects based on a joint economic benefit calculation still contained in the JOA would “create an untenable mismatch in the process for selecting an interregional economic transmission project and the process for allocating the costs of that project.”

MISO and PJM cannot “employ an additional interregional benefit-to-cost analysis that is calculated differently than either of their individual, regional benefit-to-cost analyses,” the commission said.

FERC upheld an earlier decision to replace MISO’s requirements that a qualifying project be at least 345 kV and meet a $5 million cost threshold with a 100-kV voltage minimum and no specified cost floor.

However, as pointed out by the Organization of MISO States, the commission realized it did not address MISO’s lack of Tariff language on cost allocation for sub-345 kV projects. Market efficiency projects in MISO are currently allocated 20% to all transmission customers and 80% to transmission customers in local resource zones. FERC gave the RTO 30 days to either include sub-345-kV interregional projects into the existing cost allocation or create a different allocation method.

MISO is already considering expanding its market efficiency voltage threshold to include sub-345-kV economic projects; cost allocation overhauls will be discussed throughout 2017. (See MISO Stakeholders Propose Changes to Market Efficiency Cost Allocation Process.)

No Joint Model

Solomon said the order invalidates the need to create a joint model because FERC has accepted MISO and PJM filings that removed any references to such a model.

FERC last April directed the RTOs to explore the possibility of a joint model that uses identical assumptions and criteria to align their respective regional processes. In December, MISO staff said a joint model using identical assumptions would be difficult to accomplish. (See “MISO Says Common Assumption Set with PJM a No-Go,” MISO Planning Subcommittee Briefs.)

MISO will instead use regional metrics to independently quantify benefits and split project costs.

“It’s pretty clear what we need to do going forward,” Solomon said.

Not Applicable to MISO-SPP Seam

MISO members hoping that the NIPSCO order would be applied to the SPP seam will have to wait for a fresh docket. FERC said its NIPSCO directives “are limited to issues pertaining to the MISO-PJM seam.” The commission rejected ITC Holdings’ request that MISO also relax SPP interregional cost and voltage thresholds — still at $5 million and 345 kV — saying ITC brought no evidence forward to support the rule extension.

FERC accepted new JOA language that describes interconnection coordination procedures already in place in the RTOs’ governing documents, language stipulating that each RTO will monitor the other’s transmission system for potential impacts and include concerns in the system impact studies of the interconnection process. The RTOs will also exchange data at least twice each year to study the impact of the other’s interconnection requests on its own transmission system.

Coordinated System Plan Needs Work

However, FERC found MISO and PJM only “partially” complied with the commission’s directive to revise the JOA to describe how the RTOs will incorporate their respective transmission expansion planning processes into future coordinated system plan studies.

The commission directed the RTOs to submit another compliance filing detailing how the plans would be integrated and create “binding deadlines” for an annual review of issues and when to decide on whether they should embark on the studies. MISO and PJM had proposed an information exchange in the fourth quarter of each year that would lead to a joint review of regional issues the following January, but they did not provide specific deadlines.

FERC denied NIPSCO’s request that market-to-market payments be added to the JOA benefit calculation. The commission said the addition would double-count a portion of the congestion — an issue still under scrutiny in a separate complaint. (See PJM, MISO Go Quiet on Pseudo-Ties; Reach Interface Pricing Accord.) FERC also said market-to-market payments do not reduce production costs but are transfer payments between RTOs “that make the RTO that redispatched its system whole for the increased production costs that it experiences to allow the other RTO to exceed its firm flow entitlements.”

FERC also denied a request by a group of MISO generators that the RTOs better identify constraints and flowgates, saying it was not an issue raised in the original NIPSCO complaint since the complaint “made only incidental references to flowgates.”

Retirement Coordination Approved

In a separate order issued last week, FERC unconditionally accepted the MISO-PJM generator retirement coordination plan (ER16-1969-002) with little comment. The plan adds generator retirement study information-sharing and mutual evaluation rules to the RTOs’ JOA. (See MISO Outlines Retirement Coordination with PJM.)

2017 MEP Identification Underway

Ling Hua, MISO’s interregional economic transmission planning adviser, said MISO and PJM have begun work to identify interregional market efficiency projects. Both RTOs have opened issues submission windows that allow members to submit solution proposals until the end of February. From March to September, the RTOs will evaluate project proposals for year-end approval by their respective boards.

The two RTOs have separately identified congested flowgates ripe for interregional efficiency projects, with MISO submitting 13 possible projects and PJM identifying four. The only potential project common to both lists is the Olive-Bosserman 138-kV project on the western Michigan-Indiana border in American Electric Power’s territory.

Solomon said he expects a learning curve this year in identifying interregional projects as RTO staff and stakeholders move to a new interregional process.

“We’ve kind of been stuck in between two interregional processes until yesterday,” Solomon said at the IPSAC meeting.

A day before the order issuance, at its Jan. 18 Planning Advisory Committee meeting, MISO reported that it considered all nine directives in the NIPSCO order completed as of Dec. 15.