The Midcontinent Independent System Operator (MISO), in an effort to clear up recent problems in its power project queue system, on Dec. 31 filed with the Federal Energy Regulatory Commission some proposed changes to that system.
The proposed changes follow an extensive stakeholder process and are designed to reduce processing delays in MISO’s generator interconnection queue and provide increased flexibility and certainty to Interconnection Customers and other affected parties. MISO requested an effective date of March 30, 2016, for the revisions. To ensure that all interested parties have an adequate review period, MISO requested that the comment date for this filing be set on Jan. 29, 2016.
It has been four years since MISO’s last queue reform effort. With recent changes in fuel economics and the infrastructure landscape, MISO noted that it will be facing new, and significant, infrastructure challenges. Studies conducted by MISO and its stakeholders indicate base projections of reserve margin shortages as soon as 2020.
The filling said: “MISO is expecting significant new renewable and gas investment in its footprint in response to the changing regulatory landscape. These challenges require a smoothly functioning generator interconnection process, but MISO’s current queue procedures are straining to meet today’s needs, let alone the emerging challenges. MISO respectfully submits that urgent reform is needed to ensure that it is well equipped to handle the new challenges.
“Over the past couple of years, MISO has experienced significant delays in its generator interconnection queue, particularly in the Definitive Planning Phase (‘DPP’). As acknowledged by industry groups and MISO’s information reports to the Commission, the principal reason for these delays is the need to conduct multiple unscheduled restudies of lower-queued projects each time a higher-queued project is withdrawn from the queue.
“Because generator and transmission assumptions are interrelated, whenever a higher-queued project withdraws from the queue, that withdrawal changes the underlying assumptions in the Interconnection Studies conducted by MISO for lower-queued projects. The resulting restudies, which often have a cascading effect, impair MISO’s ability to administer the queue in a timely fashion and significantly delay the execution of GIAs by Interconnection Customers and extend the uncertainty in project costs. In addition, projects that are not ready to proceed have no incentive to voluntarily exit the queue under the current procedures. Instead, they linger in the queue until the very last moment, often when the impact of their withdrawal on other projects is at its greatest.
“Consistent with the Commission’s standing directive to MISO ‘to address identified inefficiencies in its GIP,’ this filing builds on MISO’s prior queue reform efforts and proposes several important improvements to the GIP to optimize the restudy process and address certain other concerns identified by MISO and in the stakeholder process.”
The principal elements of the MISO proposal include:
- Minimization of Unscheduled Restudies – The proposed revisions are designed to minimize unscheduled restudies, which have been identified as one of the primary drivers for the current queue delays. This is mainly accomplished by: subdividing the DPP into three sequential phases to provide for a structured restudy process; creating two designated off-ramps for Interconnection Customers to withdraw projects that are not ready to proceed; and restricting restudies after the GIA stage. First, each of the proposed DPP phases will include a System Impact Study at a defined point in the process: a preliminary study in DPP Phase I, a revised study in DPP Phase II and a final study in DPP Phase III. Second, two designated off-ramps, known as Interconnection Customer Decision Points I and II are created to allow an Interconnection Customer to withdraw its project from the queue on a more structured basis than is currently the case. Decision Point I occurs immediately after the preliminary study in DPP Phase I while Decision Point II occurs immediately after the revised study in DPP Phase II. As a result, the revised study and the final study during the DPP will be conducted by using updated facts and assumptions taking into account higher and similarly queued projects that have withdrawn at the new Decision Points, thereby incorporating a scheduled restudy in the process. This process eliminates the need for unscheduled restudies during DPP Phase I and DPP Phase II while minimizing their use in DPP Phase III. Third, the proposed revisions address restudies after the GIA stage. To minimize such restudies, MISO proposes to remove a requirement of the pro forma GIA that an Interconnection Customer with a completed GIA undergo a restudy due to a change to a higher-queued project, except when ordered by the commission.
- Enhancement of Interconnection Customer Readiness – The current procedures require Interconnection Customers to make a “cash-at-risk” payment prior to entering the DPP. This payment is known as the “M2” Milestone or the “DPP Entry Milestone.” Because M2 has not prevented unscheduled restudies within the DPP, MISO proposes to add two new Milestones, M3 and M4, to be established in DPP Phases II and III. The new milestones will follow the proposed Decision Points I and II and, at each Decision Point, the withdrawing Interconnection Customer would be refunded the immediately preceding milestone payment. The proposed structure ensures that Interconnection Customers choosing to remain in the queue will have greater certainty because projects that are not ready to proceed are incentivized to exit at the designated Decision Points.
- Additional Revisions to the GIP – MISO proposes several additional changes to the GIP that are designed to streamline the process and make it more flexible and efficient. First, MISO proposes to include a new, voluntary Pre-Queue Feasibility Phase while eliminating the current Interconnection Feasibility Study. This change benefits potential Interconnection Customers by providing them with an analysis that can help guide a decision to submit an Interconnection Request, potentially saving the Interconnection Customers’ time, money, and resources. Second, MISO proposes to eliminate the System Planning and Analysis (SPA) Phase from the process, replacing it with the Pre-Queue Feasibility Phase. With the proposed restructuring of the DPP and the creation of the Pre-Queue Feasibility Phase, the SPA Phase would no longer serve a useful purpose. Finally, MISO’s proposal increases the process flexibility available to Interconnection Customers as Interconnection Requests can now be reduced in size during DPP Phase I.
MISO noted that it has made several queue reform filings in the past and has learned from each one. In each of the queue reforms, MISO has taken stakeholder feedback and made adjustments to the proposals as was done in this current proposal. MISO has listened to transmission owners, wind developers and industry groups, transmission dependent utilities, independent power producers, and other stakeholders in the current round of queue reform.