While there is some tension on the capacity deliverability issue between the Midwest ISO (MISO) and PJM Interconnection, there is a “very positive relationship overall” between the RTOs, Richard Doying, MISO’s vice president of operations told TransmissionHub May 11.
Doying and Andy Ott, senior vice president, markets, with PJM, have exchanged correspondence recently on coordination issues.
In his May 4 letter to Doying, Ott voiced concerns on delays on MISO’s behalf in meeting to discuss a process for embracing various coordination issues.
He also said that while MISO’s public statements have focused on its proposal for capacity portability, there are additional issues that require prioritization, discussion and review, including outage coordination, congestion management and transmission planning.
Ott also said PJM remains troubled by MISO’s public assertions that PJM believes are inaccurate.
“The most significant concerns are the continued uncaveated reference to results of consultant studies that have been acknowledged as preliminary and inaccurate by the consultants and the assertion that PJM ‘refuses’ to discuss these issues,” Ott said. “A review of the contemporaneous communications between us [belies] these continued public assertions, none of which are helpful to the kind of coordination and dialogue that is important to thoughtful issue resolution. That being said, our goal is to move forward, reduce rhetoric and ensure an orderly, open and transparent process where all relevant issues can be identified, prioritized and addressed.”
In his May 10 response letter to Ott, Doying said efforts are underway to address most solutions to enhance seams coordination, including capacity deliverability, interchange optimization, outage scheduling, congestion management processes and transmission planning.
He said MISO agrees with PJM in that there are numerous cross-border and market coordination issues between the organizations that should receive immediate attention and resolution. MISO also agrees that these issues can and should be resolved in the context of the joint operating agreement (JOA), which is a product of the joint and common market (JCM) process.
MISO also agrees that there is a difference of opinion on the results of consultant studies on the magnitude of consumer benefits of capacity deliverability. “[Y]our May 4th letter makes clear that PJM considers capacity deliverability a ‘longer-term’ item and a ‘proposal’ rather than a high priority issue demanding prompt resolution,” Doying added, noting that MISO disagrees with that position and believes that the magnitude of potential consumer savings makes it essential to quickly address capacity deliverability.
He included a proposed process for MISO and PJM to enhance seams coordination under the JOA, as well as a proposed timeline.
A PJM spokesperson told TransmissionHub May 11 that PJM will review Doying’s letter. “A series of joint stakeholder meetings, as PJM proposed, to familiarize all parties with the topic and issues should occur before a technical conference,” the spokesperson said.
Tension exists, but overall positive relationship
Doying told TransmissionHub May 11 MISO and PJM executives have met to discuss the seams issues. “I don’t think I would agree that there’s been a delay based on anybody trying to, or consciously not being willing to set up meetings or have phone calls,” he said.
He also said a team meets regularly to discuss operational issues as well as opportunities to enhance the JOA. The team has been working on congestion management and will continue to do so, he said, noting that with FERC Order 1000, transmission planning, frankly, will not be as relevant under the JOA.
Also discussed is outage coordination. “I think that’s an area where we certainly have probably the biggest opportunity in terms of enhancing what we’re doing today and making some progress [in a] positive direction in terms of how we could be better coordinated in the future,” he added.
Regarding inaccuracies in consultant studies, Doying said the Brattle Group acknowledged that its December 2011 report on the MISO-PJM capacity market seam was a draft report. “Until that study is final, then certainly there is uncertainty around the level [of consumer benefits], but I’m not sure I would agree with Andy that there are inaccuracies in terms of what has been reported from that,” he said. “We have been pretty consistent in saying that the upper limit that was included in the study is just an estimate, and a preliminary estimate, but it clearly shows that there are billions of dollars on the line.”
Doying also said what MISO is “hoping to get movement on is getting a willingness on the part of PJM and [its] stakeholders to critically evaluate the [capacity deliverability] issue and if there are solutions to be developed, to work with MISO to develop those solutions.”
He said while there is tension on the capacity deliverability issue as there is disagreement on how to move forward, “we have a very positive relationship overall, both at the staff-everyday-working level as well as the executive level with PJM.”
Doying said that by incorporating seams coordination with PJM, “[w]e will be able to increase reliability and efficiency, which will ultimately reduce costs to MISO and PJM members and their customers.”
He also said seams coordination efforts would have happened without FERC Order 1000.
“We’ve been discussing, implementing and improving seams coordination since the FERC ordered [the] joint-and-common-market initiative in 2004-2007,” he said. “Capacity deliverability and the benefits of it were raised as a seams issue in the 2004-2005 [period]. We have completed or are in the process of completing seams coordination enhancements – the recent effort has been to eliminate artificial barriers to efficient energy transfers between MISO and PJM. The recent, heightened focus on capacity deliverability is because increased capacity deliverability creates substantial consumer savings and is the next logical step in terms of market coordination.”
Doying also said the first joint meeting on interregional planning was held recently with the Southwest Power Pool (SPP), noting that it was a good, first step in the right direction and MISO looks forward to continuing those discussions.
“This is an issue we’ve been studying and examining for quite a while as we’re always looking for ways to facilitate efficient capacity transfers between regions,” Doying said.
Regarding the coordination timeline, he said MISO believes a good faith effort by all parties will yield the desired outcome and can be completed by next year’s deadline.
Doying also said that the JCM is not the only umbrella under which this coordination can happen. While there are other forums, the JCM process is a known, well-established and results-oriented process that was used successfully to develop the existing JOA and market-to-market congestion management, he said.