PAC: Attachment GGG Merchant HVDC Transmission Connection Procedures Draft Tariff (20211013)

Apex Clean Energy Management opposes the use of Self Funding for Merchant HVDC projects. 

The basis of  Apex's opposition is threefold: 

1. Self-Funding is a contentious matter in MISO and other regions, and is currently subject to active litigation before FERC and the DC Circuit Court of Appeals.  Multiple deficiency notices have been issued on Self-Funding in the New York TOs and PJM proceedings.  FERC rejected the NY TOs' Self Funding proposal and there is no reason to believe the contemplated tariff changes will be found reasonable.        

 2. In Apex's development experience, Self Funding can double interconnection costs without providing additional benefit other than the creation of a separate revenue stream.  To the extent MISO intends to impose Self-Funding on Merchant HVDC facilities, this new cost will have a chilling effect on investment in such facilities, and raises market power issues.   

 3. As implemented in MISO, Self-Funding is imposed without the consent of the generation or transmission developer.  It is a forced obligation decided on a unilateral basis by the TO.  The only uncertainty is whether the TO will or will not impose the obligation.  Consent to Self Fund on the part of the generation and/or transmission developer would be a way to address and remedy this fairness issue.    

Environmental Sector comments to PAC re: draft tariff language for Attachment GGG Merchant HVDC Transmission Connection Procedures.  

The Environmental Sector appreciates the opportunity to comment on MISO’s proposal to amend Attachment GGG of the tariff to extend TO-funding to Merchant HVDC (MHVDC) transmission projects that do not obtain injection rights. In sum, we object to this expansion of TO funding because (1) we do not see this as a simple clarification of the tariff, but rather a material and significant extension of TO funding rights without appropriate vetting and stakeholder deliberation, and (2) it appears to increase the cost and risks of new MHVDC transmission projects without providing commensurate benefits to the system or ratepayers. 

The proposal goes further than simply addressing an “inconsistency” in the tariff. 

The Environmental Sector rejects the premise put forth at the October 13th PAC meeting that the proposal to extend TO funding to Attachment GGG MHVDC projects is nothing more than addressing an inconsistency in the tariff. In fact, the proposal would extend TO funding to a whole other transmission project category not previously considered for TO funding.  

MHVDC is required to go through two separate interconnection procedures. One is the transmission-to-transmission interconnection and the other is the process to obtain injection rights. It is that provision of injection rights - which invokes the generator interconnection queue process - that triggers Attachment X of the tariff where TO funding provisions for network upgrades are contained. 

Here, ITC and MISO want to allow self-funding for upgrades triggered simply through the transmission-to-transmission interconnection for MHVDC projects even though the MISO tariff does not provide for TO-funding of the triggered upgrades for typical AC transmission-to-transmission interconnections. Further, as far as we are aware, no previous TO-funding election has resulted in an agreement similar in form to what is envisioned in the proposed amendments to Attachment GGG. 

Given this, it is difficult to understand how ITC and MISO can credibly claim that this is merely a “clarification” of the existing tariff rather than a significant expansion of existing TO-funding rights. 

This also makes sense from a technical standpoint because it is the injection of energy onto an existing transmission system that would trigger the increased risk or cost to the incumbent TO that has been used to justify TO-funding in the first place. While it is worth debating whether this increased cost or risk rises to the level of justifying TO-funding at all, that is not the debate before us. Relevant to this debate, however, is that without the injection of energy onto the incumbent TO’s system, the rationale, however thin, for TO-funding disappears. 

In sum, whether based on a review of the plain language of the current tariff or on consideration of the rationale for TO-funding, it is clear that what ITC and MISO are seeking is not a clarification of the existing tariff, but a significant expansion of TO-funding to a separate and distinct category of projects that do not seek the injection rights that would typically invoke TO funding. 

As such, the Environmental Sector objects to the truncated process that this proposal has been given - a process that has not allowed for due consideration by stakeholders or meaningful debate on whether the proposal is just and reasonable or nondiscriminatory. At a minimum, we request that this proposal be taken back to the Interconnection Process Working Group for presentation by MISO and further discussion and debate on the merits. 

Extending TO funding to non-injecting MHVDC projects will arbitrarily increase the costs of these projects without providing commensurate benefits. 

At the October 13th PAC meeting, ITC and MISO representatives were asked to articulate the risks to incumbent TOs that might warrant the increased profits generated by this expansion of TO funding to non-injecting MHVDC projects, or to articulate the additional benefits to the system or ratepayers that would justify the additional cost imposed by TO funding. Neither response provided reasonable, substantive rationale for the proposed tariff amendments and expansion of TO-funding to non-injecting MHVDC projects. 

Without a clear articulation of commensurate benefits to the system that can be achieved through TO funding, the Environmental Sector strongly objects to the proposed tariff revisions that will increase the costs and risks to merchant developers of new transmission projects. Without a clear articulation of the additional risk or burden that non-injecting MHVDC projects impose on transmission owners, we again object to the proposed tariff revisions that will increase profits for TOs at the expense of ratepayers. These are the issues that need to be explored before this proposal is put before FERC. 

There is already common understanding among MISO and the stakeholder community of the urgency to invest in transmission solutions, and MHVDC projects may provide unique value to meeting system needs over the coming years. The current proposal, however, will ultimately discourage such projects at a time when new, innovative transmission solutions are desperately needed to facilitate the generation shift underway. Because MISO and ITC have not articulated a substantive rationale for this expansion of TO funding, the Environmental Sector objects to the proposal moving forward and requests that it be sent back to the IPWG for further discussion and debate. 

Sincerely

MISO Environmental Sector

Clean Grid Alliance Comments on Expansion of TO Self-Fund to Attachment GGG Projects
October 27, 2021

Clean Grid Alliance appreciates the opportunity to provide comments on MISO’s proposed expansion of TO self-funding to Attachment GGG. We oppose this expansion and support the Environmental Sector’s comments to MISO on this topic. 

Additionally, we raise concerns regarding different treatment among stakeholders in regard to stakeholder proposals at MISO. ITC presented a proposed expansion of TO self-funding to Attachment GGG at the IPWG, but MISO, as the independent entity did not present on the proposal at the IPWG. Yet, MISO has not permitted Clean Grid Alliance or other stakeholders to make a stakeholder presentation at a lower committee like the IPWG or PSC and then take the issue or proposal up at the parent committee (PAC) without MISO first taking it up and presenting in the lower committee after the stakeholder presentation.  Individual stakeholders do not have the same independent and transparency standards as MISO does in addressing concerns raised by other stakeholders, and thus should not be able to substitute for MISO in these instances.  

Clean Grid Alliance proposed an addition to the Stakeholder Governance Guide at the Oct. Stakeholder Governance Workshop to provide for more equal treatment among MISO stakeholders and sectors going forward. We encourage MISO to treat all stakeholders in a similar manner in regard to stakeholder presentations and proposals going forward, and would appreciate a presentation by MISO for IPWG members on this topic, given that many (possibly even a majority) of the IPWG members do not attend the PAC meetings.  

Sincerely, 

Rhonda Peters, Ph.D.
Technical Consultant for Clean Grid Alliance 

Transmission Owner Sector Comments on Amendments to Attachment GGG

October 27, 2021

The Transmission Owners (Owners or TOs) appreciate MISO continuing the dialogue on the proposed amendments to Attachment GGG to include TO-funding for necessary and network upgrades on TOs’ system identified in system impact studies for MHVDC interconnections.  The Owners support the amendments, which will allow the TOs to self-fund and earn a return on the identified upgrades, consistent with corollary provisions for self-funding in Attachment X and the DC Circuit’s decision in Ameren Services Company, et al. v. FERC, 880 F.3d 571 (D.C. Cir. 2018).   The TOs submit the following comments related to the October 13, 2021 PAC (“October PAC”) presentation and discussion:

1. Questions About Applicability of Amendments

During the discussion at the October PAC, several commenters posed various questions about how the overall Attachment GGG process works.  There appeared to be confusion over what types of MHVDC projects were covered by the amendments and how TO self-funding was newly being applied.  The TOs believe that some of the confusion stems from an incorrect distinction made in the presentations at the July and September IPWG meetings on this topic, which indicated that under the current tariff a MHVDC project injecting power would execute a GIA – and self-funding already existed for the network upgrades for such a project through Attachment X – while a MHVDC project withdrawing power would not have similar self-funding mechanism applied to it under Attachment GGG.  MISO corrected that distinction in the October PAC presentation noting instead that although a MHVDC project injecting power is studied under Attachment X, a GIA will not be executed, and instead a TCA is executed for a MHVDC project that is injecting power, just like a MHVDC project withdrawing power.  Therefore, the amendments would result in TO self-funding being newly applied to MHVDC projects both injecting and withdrawing power. 

Although stakeholders raised questions pertaining to this topic – i.e., the distinction between projects withdrawing or injecting power for purposes of TO self-funding – they are not relevant to the issue of ensuring consistency across the MISO tariff.  The same presentations at the July and September IPWG meetings clearly identified that the amendments would result in TO self-funding being applied to necessary upgrades and network upgrades identified in the Attachment GGG studies.  The October PAC presentation additionally corrected the identified error in the July and September IPWG presentations regarding the injecting/withdrawing distinction and made clear that the amendments would newly apply the self-funding option to necessary upgrades and network upgrades identified in the entire Attachment GGG study process.  At the October PAC meeting, it was agreed to take the topic back to the IPWG in November out of an abundance of caution to ensure stakeholders there also have an opportunity for this clarification, thus stakeholders will not be deprived of an opportunity to discuss, debate, or analyze the issues relevant to these amendments. 

2.  Questions About Overall Attachment GGG Process

During the October PAC, several stakeholders asked a myriad of questions about how Attachment GGG works overall.  However, it is clear that the amendments are not changing any process or procedure in Attachment GGG.  The amendments are only applying TO self-funding to necessary and network upgrades identified in Attachment GGG studies in the same way that TO self-funding is available to any such upgrades identified in Attachment X studies.  The overall Attachment GGG process was vetted through extensive stakeholder discussions in 2017 and 2018 and ultimately approved by FERC in 2018.  Thus, there have been many opportunities for stakeholders to learn about Attachment GGG

3.  MHVDC Transmission Lines v. Transmission Systems 

During the October PAC, stakeholders raised the question about why neighboring TO systems do not apply TO self-funding to upgrades on neighboring TOs’ transmission systems but TO self-funding would be applied to MHVDC projects.  The short answer is that MHVDC projects connecting to TOs’ transmission systems are different than neighboring TOs’ transmission systems connecting to each other.  MHVDC projects are processed through the Attachment GGG procedures, which are based on the Attachment X procedures, and the TOs’ transmission systems are planned through the annual MTEP process.  The MHVDC projects have been deemed to be more like generator interconnection projects than transmission lines planned through the MTEP.  Therefore, any suggestion that MHVDC projects should or must have frameworks applied to them which are identical to the framework applied to TOs’ transmission systems is inconsistent with the established MISO planning processes. 

4.  Necessary Upgrades and Network Upgrades

During the October PAC, stakeholders raised the question as to whether necessary upgrades are the same as network upgrades for purposes of TO self-funding.  MISO correctly pointed out that the distinction between necessary upgrades and network upgrades is irrelevant for the purposes of TO self-funding.  Under Attachment X, network upgrades are identified in the studies to interconnect the project and are eligible for TO self-funding.  Under Attachment GGG, which is intended to apply the relevant provisions of Attachment X to MHVDC projects, necessary upgrades and network upgrades are identified in the studies to interconnect the project.  For purposes of TO self-funding, there is no reason to distinguish network upgrades identified by Attachment X studies from necessary and network upgrades identified by Attachment GGG studies.

5.  Transition Mechanism

During the October PAC, stakeholders raised the possibility of including a transition period in the tariff to delay the implementation of the amendments.  As MISO indicated, there is no basis to include such a transition period given how amendments to the tariff are usually implemented.