In the June 23 meeting of the Planning Advisory Committee (PAC), MISO proposed reforms to MTEP quarterly project status reporting. Stakeholders were invited to submit feedback on companion edits to BPM-020 by July 23.
The Transmission Owners appreciate MISO continuing the dialogue on the topic of MTEP Status Reporting improvements over the past few PAC meetings. The Owners generally support the overall effort and would like to focus on making improvements to the data being reported going forward to ensure the information is valuable to MISO and the Stakeholders and to also engage in a future discussion on streamlining of the process. Our specific comments on the proposals from the June 23, 2021 PAC presentation are as follows:
A. Engagement and Rigor (slide 5):
The TOs support the effort by MISO to work with us to resolve information inconsistencies within the MTEP Status Report, and we encourage MISO to leverage this work with the associated Data Architecture improvements by identifying opportunities to streamline the submission of this data going forward. We understand that once this effort is completed, under the proposed revisions to Section 4.2.3.1 Project Status Updates in BPM-20, MISO will check in with each TO twice each year to review the Owners’ project status report.
B. Process (slide 6):
Regarding the “Narrative Requirements” included on slide 6, the TOs support the inclusion of a narrative description of the lead-time requirements for projects submitted into MTEP Appendix A with an in-service date (ISD) of 5 or more years in the future. To simplify counting, the Owners propose that the 5 year clock begin with the month following Board approval of the project in MTEP. For example, if the Board approved a project in December 2021, then a project with an ISD of January 1, 2027, or later would be considered 5 years in the future and require the TO to provide a narrative explanation.
The Owners note that established NERC planning criteria tend to drive the timing requirements for transmission projects, as they establish a “need-by” date, which is driven by NERC’s TPL-001 planning horizons. NERC TPL-001-4, “Transmission System Planning Performance Requirements” require Transmission Planners (TPs, typically the TO) and PC to evaluate system conditions in 3 planning horizons: two years out, five years out, and a year that is six-ten years out (MISO uses a 10 year model). Violations of NERC Planning Criteria that are seen in those models require mitigation, and opportunities for a TP to mitigate through redispatch are very limited. The earliest of the models in which a transmission issue appears will determine the “need-by” date of a transmission project, and the need-by date in turn drives the construction start date and the associated timing for submission of the project in MTEP process for review. MISO Board approval of a project in MTEP-A is typically when the TO will begin project scoping and construction planning.
A typically transmission project includes project design, budget approvals, right of way acquisition, regulatory approvals, governmental approvals, environmental approvals and mitigation, long lead time material procurement, outage scheduling, as needed coordination with other neighboring entities, and construction. Given the lengthy nature of these activities, a project could reasonably take 4 or 5 years to bring into service. Thus, it is not reasonable for re-evaluation of projects with a 4 or 5 year lead time.
Other types of projects that might have longer lead time include generation and load interconnections which might have longer construction periods due to the specifics of those projects.
C. Data Architecture and use of nominal dollars (slide 8):
Use of Nominal Dollars:
Time of cost information: While MISO’s suggestion of requiring the TOs to move to the use of nominal dollars for project reporting may seem simple from an external viewpoint, to the TOs, it is not. Projects are submitted into MTEP based on planning level estimates. In order to create estimates using nominal dollars, the TOs need to have engineering level estimates which identify the timeframe for certain events such as the purchase of materials and construction. These engineering level estimates require significant time and effort, so are only performed after a project has been approved for inclusion in a MTEP. Thus, it is not efficient for all TOs to provide project estimates in nominal dollars when first submitting a project.
A requirement to use nominal dollars would result in many TOs being required to change their current corporate financing, budgeting, and accounting practices that would be a very significant undertaking for questionable value to stakeholders. Additionally, there are instances within MISO’s current processes where MISO has requested that Owners convert data that has been submitted in nominal dollars into actual dollars and vice versa, and feel that it would be useful to have further discussion on this issue and to better understand MISO’s internal processes.
As an alternative, the TOs suggest that MISO maintain the current practice of allowing a TO to submit project costs in either nominal or actual costs but require that the Owner specifically identify whether the costs are in current year or nominal dollars. If MISO wishes to provide the costs in nominal dollars, MISO could escalate the costs using MISO’s identified inflation rate and include that in a new field in the database. This approach would avoid a wholesale revamping of the TOs corporate practices while ensuring consistence across the TOs by the use of a central interest rate. There is precedent for this with how several years ago MISO worked with the TOs to update the MVP dashboard.
Significant deviation dashboard:
The TOs see value in working with MISO to develop a dashboard for use at the PSC to identify significant deviations in cost and/or ISD for approved projects. Although this information is publicly available now, there may be easier ways for the information that stakeholders find useful to be presented in a more consolidated format.
Ideas for Future Process Streamlining:
The TOs also look forward to working with MISO and other stakeholders to streamline and clarify the information included in the database to make it easier for the TOs to submit and stakeholders to access and understand. For example:
Future Data Architecture Changes:
While the TOs understand that making significant changes to the architecture of the MTEP database will require time and effort on the part of both MISO and the stakeholders, the TOs encourage MISO to begin the process of identifying the business requirements of a new database. It will be important for MISO to solicit input from the TOs who are the entities responsible with submitting and updating the data but it is also important to identify the needs of all of the users, the TOs, MISO, and other stakeholders to ensure the new structure meets the range of uses and needs.
PAC-2021-2 Feedback
The TDU Sector thanks MISO for continuing to look at reporting improvements as described at the June 23rd PAC meeting relating to PAC-2021-2. While the proposed reporting enhancements are welcome, improved transparency through increased reporting is not the focus of our concerns.
Consistent with the feedback provided following the April 28th PAC meeting presentation on this topic, the TDU Sector is seeking a more robust process for MISO to re-evaluate the technical justifications of projects after MTEP approval. This is especially true of projects that are approved many years into the future or where stakeholders raise specific concerns around changes in system requirements following MTEP approval. MISO presented data at the June PAC meeting showing only a small percentage of projects approved greater than 5 years in the future. Yet, over that same timeframe, the same analysis shows that 35% of MTEP projects were approved for construction more than 4 years in the future. This represents a large portion of the investments approved by MISO.
MISO cannot continue to stop evaluating transmission investments following project approval in any given annual MTEP planning cycle by not considering new data as received from stakeholders. Planning, markets, and operations continue to be subject to increasing levels of uncertainty as baseload generators retire and more renewables enter the system. We owe it to our customers to ensure that transmission investment decisions are optimized and made based on the best available information.
We encourage MISO to proceed as planned with the reporting enhancements, but to separate the concerns raised here by the TDU Sector into another issue. Absent this action, MISO’s approach to PAC-2021-2 is not responsive to the original concerns raised by members of the TDU Sector.