The Midwest ISO (MISO) on May 21 filed changes to its open access transmission tariff to accommodate FERC’s concerns related to cost allocation and other matters as they pertain to Entergy‘s (NYSE:ETR) transition to the region.
Entergy in June 2011 asked FERC to waive certain provisions in MISO’s tariff related to cost allocation of network upgrades, which FERC denied in September 2011. In November 2011, the MISO transmission owners proposed revisions to the tariff incorporating cost allocation rules for a fixed Entergy transition period of five years.
FERC on April 19 issued an order conditionally accepting the proposed revisions, asking for further revisions, which MISO has addressed in the May 21 filing.
Among the changes MISO made is clarification of the beginning and end of the transition period, which will begin when the first Entergy operating company, or its successor in interest, joins MISO and transfers functional control of its transmission facilities. “Success in interest” applies to any possible transfers of ownership of any Entergy operating company before the start of the transition period.
The transition period will end on the day after the end of the MISO transmission expansion plan (MTEP) approval cycle pending at the end of the fifth year of the transition period, where the MISO board of directors considers any proposed set of multi-value projects (MVPs) planned before and during the transition period, with the goal of achieving net benefits to MISO’s existing footprint (first planning area) and Entergy’s footprint (second planning area).
MISO also revised certain sections of Attachment FF-6 to reflect that benefits in the second planning area will not be used to justify projects, particularly market efficiency projects (MEPs), that terminate exclusively in the first planning area, and vice versa. The new language (section II.B.2) now says, “When an MEP planned during the second planning area’s transition period will terminate exclusively in one planning area, the transmission provider’s benefit assessment will consider only the MEP’s benefits in the planning area where it terminates.”
Sections II.B.3.a and II.B.3.b in Attachment FF-6 have been changed to provide that projects planned during the transition period, and approved either during that period or at the end of an MTEP cycle pending at the end of the transition period’s fifth year are included in MISO’s MVP Portfolio2. “This is intended to clarify that that MVPs planned during the transition period that terminate exclusively in the first planning area should be considered as part of MVP Portfolio, not MVP Portfolio1.”
The cost of MVPs approved during the transition period that terminate in both planning areas will be shared across both areas during and after the transition period, MISO said.
MISO added language to section II.B.3 to reflect that the identification of projects potentially comprising MVP Portfolio2 will also consider alternative solutions, and ensure costs are allocated commensurate with benefits: “The cost-benefit formulas will be applied iteratively, as the transmission provider will evaluate alternative solutions to determine the MVP portfolio configuration that cost-effectively addresses the identified transmission issues, and ensures that benefits are at least roughly commensurate with costs.”
MISO has also changed its tariff in order to delineate how MVPs that terminate exclusively in either planning area and are approved before or during the transition period will be handled in the event that the combined MVP portfolio does not satisfy the cost-benefit test, the RTO said. The tariff now provides that MISO will allocate to the first planning area the costs of MVPs planned before the transition period that terminate exclusively within it, and that were approved before or during the transition period; and apply the existing provisions of Attachment FF to determine whether the costs of MVPs approved during the transition period will be shared across the planning areas.
If the combined portfolio does satisfy the cost-benefit test, Attachment FF-6 will also govern the MVP usage rate (MUR) applicable to MVPs approved during the transition period, MISO said.
MISO also made revisions to Attachment MM to distinguish and explain the calculation of a system-wide MUR.