Entergy would owe SPP for congestion if it joins MISO – CRA

If Entergy (NYSE:ETR) joins the Midwest ISO, there will be additional congestion on reciprocal coordinated flowgates (RCFs) that would require redispatch by and payment to the Southwest Power Pool (SPP), Charles River Associates vice president Ralph Luciani testified on March 16. 

SPP requested that CRA assess what the impact of Entergy potentially joining MISO would have on RCF loadings and congestion. In his testimony, filed with the Arkansas Public Service Commission on behalf of the Southwest Power Pool, Luciani said Entergy would need to compensate SPP for 620,000 MWh on net if it joins MISO.

RCFs are the set of flowgates that can be significantly affected by the operations of two or more parties that have agreed to adhere to a set of operating coordination principles, or the congestion management process (CMP), according to the filing. 

CRA in 2010-2011 performed a series of cost-benefit analyses (CBAs) for Entergy, Entergy Arkansas, and/or Cleco Power, a subsiidary of Cleco (NYSE:CNL), joining an RTO, which culminated in the “Join MISO Addendum Study” issued on March 10, 2011. As part of the Entergy CBAs, CRA analyzed the impacts on the Entergy, Cleco Power and SPP regions using the General Electric Multi-Area Production Simulation (“GE MAPS”) model of the Eastern Interconnection, according to the testimony.

In the Join MISO Addendum Study, CRA ran separate GE MAPS and compared the effects of Entergy and Cleco continuing to operate as they do today (“status quo”) and joining MISO (“Join MISO”).

The number of binding hours on the RCFs increased from 3,441 in the “status quo” case to 5,601 in the “Join MISO” case in 2013, an increase of 63%. 

Based on the GE MAPS modeling, the average RCF shadow price for these 5,601 binding hours in the Join MISO Case is $10.6/MWh.

Luciani added that the quantity difference in binding hours is “likely conservative.”

SPP would have on net about 825,000 MWh in which it would need to be compensated for redispatch in the “Join MISO” case, Luciani testified. 

In comparison, assuming a market-to-market CMP were in place in the “status quo” case, SPP would be compensated for about 205,000 MWh of redispatch on net, he said. 

“Thus, the estimated increased amount of redispatch for SPP is 620,000 MWh on net in the ‘Join MISO’ case,” Luciani said.