MISO includes revisions to cost allocation of baseline reliability projects in FERC Order 1000 filing

The Midwest ISO (MISO) said Oct. 25 that its FERC Order 1000 filing includes refinements to existing planning processes, such as enhancing state regulatory roles to further include their involvement in MISO’s regional transmission planning processes.

The filing includes language complying with the order’s limitations on federal rights of first refusal (ROFR), which FERC required to allow the assignment of regional transmission project construction and ownership to non-incumbent transmission developers for certain projects.

This process, MISO added, will carry out the order’s efforts to enhance the ability of states or MISO to choose the most appropriate transmission developer to implement, operate, maintain, restore and repair these regional projects throughout their lifecycle in the most reliable and cost-effective manner. It will also allow for continued reliability assurance through preservation of an incumbent transmission developer’s right to build projects designated for local reliability, MISO said.

The filing “formally provides regulators with the opportunity to be a critical part of the process and thus the solution,” Clair Moeller, MISO’s executive vice president of transmission and technology, said in a statement accompanying the filing.

In the section of the filing regarding regional planning and cost allocation of transmission projects with regional benefits, MISO said its current tariff and transmission owners agreement already largely comply with the order’s regional requirements.

MISO’s Transmission Expansion Plan (MTEP) process needs to be supplemented only in some respects to meet additional requirements of the order involving the submission or posting of certain information, including MISO’s explanation of its determinations to evaluate or not evaluate public policy-driven transmission needs for potential solutions in the local or regional planning process.

MISO proposed that the tariff revisions submitted in compliance with the order’s regional requirements be made effective with the first MTEP cycle beginning after issuance of the order. For example, the projects to be covered by the regional requirements would be those that are evaluated and approved as part of the MTEP14, which starts in June 2013.

“This timetable for compliance is necessary to facilitate a fair and orderly transition into the regional planning requirements of Order No. 1000, in a manner that would neither delay current studies under MISO’s existing planning processes nor impede progress on the implementation of existing transmission plans,” MISO said.

MISO also proposed to revise the definition of the MTEP process in the tariff to specifically refer to the goal to “comply with federal and state laws, regulatory mandates and regulatory obligations,” and to more fully use the defined term “transmission issues.”

MISO said it will post on its website an explanation of which transmission needs driven by public policy requirements will be evaluated for potential solutions in the local or regional transmission planning process and why other suggested transmission needs will not be evaluated.

Consistent with the order, MISO said its consideration is focused on the needs driven by the public policy requirements, not the policies themselves, the merits of which MISO will not evaluate either individually or in relation to each other. “The [multi-value project, or MVP] provisions do not supplant integrated resource planning, which is within the purview of the states, and the evaluation of potential solutions to needs driven by public policy requirements will also take into account the resource decisions of the transmission planning process, as directed by” the order.

Regarding states’ role, MISO said amendments to the tariff relating to the Organization of MISO States (OMS) create an OMS committee under MISO’s tariff and codify the committee’s role in MISO’s transmission planning, resource adequacy and transmission cost allocation processes.

Included in the amendments are provisions that provide for input into planning principles and objectives, scope elements, modeling inputs or assumptions and cost-benefit analyses for projects that are not proposed strictly for reliability purposes. The amendments also provide a process for the committee to request that MISO reconsider a transmission project submitted for regional cost allocation in the MTEP under certain circumstances.

In the section of the filing concerning revisions to cost allocation of baseline reliability projects (BRPs), MISO said, among other things, that proposed modifications to the existing BRP cost allocation provisions provide for 100% of the costs of BRPs to be allocated to the pricing zone where the BRP is located.

Allocating 100% of the costs in that manner is just and reasonable given that the primary benefits of BRPs are realized at the local level and the fact that MISO’s adoption of additional transmission project categories such as MVPs has diminished the role of BRPs in providing subregional and region-wide benefits, MISO said.

MISO said it will continue to work with its neighbors to improve cross-border planning and cost allocation to address the order’s interregional requirements, noting that compliance filings on those requirements are due in April 2013.

About Corina Rivera-Linares 3264 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.