MSC: Storage as Transmission Asset to Provide Market Services (IR088) (MSC2021-7(20210805)

The Transmission Owners[1] appreciate the continued discussions at MISO regarding the use of storage as transmission assets and allowing them, per FERC policy, to also provide market service(s). Such an approach will provide Transmission Owners more options for using these assets to the benefit of customers.

In the discussion at the 8/5 Market Subcommittee meeting about using storage as transmission to provide market services, the topic of “ensur(ing) the SATOA is available for the expected lifetime as reflected in the MTEP selection without additional costs resulting from market activities” was raised. During this discussion, MISO posed a question regarding the recovery of the degradation costs of a storage as transmission asset related to the market activity.  We provide our feedback below regarding this cost recovery: 

• A storage as transmission asset is always a transmission asset – regardless if it is used to provide market services.
• It is our intention, much like with the net of market activity from charging and discharging a Storage as Transmission Only Asset (SATOA), that all revenues from using a storage as transmission asset to provide market services will flow back through Attachment O to offset costs to customers.
• So, as with any other transmission asset, all of the costs associated with operating a storage as transmission asset – including one that is used for providing market services and any degradation that might be related to providing that service – should be recovered through transmission rates.
• The ultimate goal of using a storage as transmission asset to also provide market services -- when the device is available – is to more fully use transmission assets to the benefit of customers. Thus, TOs with SATOAs on an ongoing basis will take into consideration the state of the markets (including potential revenue), impact on and associated costs of a storage as transmission asset being used to provide market services, and gauge whether it is cost-effective to use the device in the market.
• The annual formula rate protocols process, including the informational filing with FERC, appear to be a good forum for sharing information about market-related costs and revenues with customers. And, while ensuring Non-Public Transmission Function information is protected, this process also could be used by a Transmission Owner to share with customers its intention for using the device to provide market services in the upcoming year and for the customers to share their views. Such an approach also seems to be an extension of FERC’s requirement that TOs with SATOAs include information about energy settlements related to operating the device in annual informational filings about rates.

Alliant Energy supports the comments submitted by DTE.

Savion, LLC (“Savion”) would like to thank MISO for bringing this item to stakeholders for discussion.  During the August 5, 2021 Market Subcommittee (MSC) meeting, MISO discussed Storage as Transmission and Market Assets potential issues.  MISO requested feedback on any elements required to address to allow a storage resource designated to provide a transmission service to also provide market services.

Savion holds that any process that allows one class of market participants access to multiple revenue streams while denying that access to other participants is prima facia discrimination.  Further, TOs will have tariff-based recovery on the cost of the SATOA while negatively impacting energy and AS revenue to GI approved ESRs, which confiscates the value of GI approved ESRs.

This proposal linked with MISO’s continued delay tactics in implementing Order 841 compliance places enormous barriers to entry on GI approved ESRs.  The level of uncertainty for generation assets which only have the GI process for approvals may become prohibitive.

In the presentation, MISO argues that the Western Grid Declaratory Order EL10-19-0000 and the FERC Policy Statement PL17-2-000 (Slide 4) provide ample guidance for this policy.  However, EL10-19 requires the asset owner become a TO.  This presents a barrier that most GI developers can not meet. PL17-2 caveats the issue of double recovery of costs needs to be addressed which clearly MISO has not.

Savion holds TOs may develop SATOA and receive cost recovery as any other transmission asset and GI approved ESRs receive revenue from the E&AS markets.

WPPI continues to support storage as a transmission asset also participating in MISO markets. At this time, the extent of WPPI’s feedback remains the comments we provided in response to a similar feedback request due 6/30/2021.

DTE reiterates the feedback provided in response to the June 30^th meeting of the MISO Market Subcommittee on this topic. As a threshold matter, MISO’s blanket reliance on the FERC Policy Statement in PL17-2-0000 (January 19, 2017) to summarily reject legitimate stakeholder concerns regarding the proposal being “discriminatory, inconsistent with FERC policy, avoids the GI queue, creates market inefficiencies and affords double compensation”[1] is misplaced. In that policy statement, FERC recognized that “by providing electric storage resources the opportunity to receive cost-based rate recovery concurrently with other revenue from market-based services (e.g., through organized wholesale electric markets), there can be implementation details that may need to be addressed, including protections against the potential for double-recovery of costs from cost-based ratepayers, adverse market impacts, and regional transmission organization (RTO)/independent system operator (ISO) independence from market participants.” Policy Statement at P 1. While FERC provided “guidance” on addressing these issues in the policy statement, that guidance does not relieve MISO of the obligation to demonstrate that at the end of the day its proposal does not give rise to these and other very important issues identified by stakeholders.

With respect to the feedback responses MISO provided in its MSC meeting materials regarding the SANTA concept, DTE finds them unresponsive to the concerns raised in our comments.  The adoption of a market participation construct for SATOAs without a comparable path for non-transmission market-participating resources to provide transmission services, such as that which would be engendered by a parallel SANTA construct, is discriminatory.  Rather than deferring development of a SANTA concept until it “becomes viable”, MISO should use this stakeholder process to develop a viable path which would ensure comparable treatment for resources owned by transmission owners and non-transmission owners. 

Additionally, DTE notes that the extent to which SATOAs can be interconnected to participate in MISO’s markets will be heavily dependent on the associated study assumptions.  Discussion of this issue was only recently kicked off in the August Planning Subcommittee (PSC) and the timeline for this work remains undefined.  Substantial completion of this work at the PSC will be a prerequisite for fully vetting the interconnection questions raised by SATOA market participation, and as such, SATOA market participation will be unable to move forward absent completion of the corresponding work at the PSC.