IPWG: ERIS DFAX Overview and Xcel Reduction Proposal (PAC-2022-3) (20220720)

MRES supports changing the ERIS DFAX cutoff from 20% to 10%. MRES agrees with and supports the Xcel Energy Resource Interconnection Service (ERIS) Distribution Factor change Proposal Presentation as justification for changing the ERIS DFAX.

As stated in the Xcel proposal and presentation “The 20% cutoff value for Energy Resource Interconnection Service used in the MISO Generator Interconnection Process results in transmission facilities that are overloaded in the DPP studies to go unmitigated. This can create problems such as 1) the unmitigated facilities bind in the MISO market resulting in significant congestion and curtailment 2) it impacts reliability such that generation cannot be delivered to load where it is needed, 3) the mitigation for the overloaded facilities often drop to later DPP cycles, and 4) could have environmental impacts since most of the generation curtailed is wind.”

Xcel also provided specific examples of 11 different constraints that had resources in the 10-20% range. Lowering the ERIS DFAX cutoff would have prevented congestion for the noted constraints.

MRES also agrees the ERIS DFAX cutoff should be changed to 10% concurrent with inclusion of the LRTP Tranche 1 projects in GI basecase. The LRTP projects will help to eliminate existing constraints and, therefore, it would be a proper time to implement the ERIS DFAX change to avoid new congestion problems in the future and avoid shifting costs for issues caused by previous interconnections to new interconnections.

While we are sympathetic with the market congestion issues Xcel raised, we feel it needs to be addressed with a more holistic planning process rather than through adjusting Distribution Factor (DFAX) for Energy Resource Interconnection Service (ERIS) process. The reasons are as follows:

• The issue statement for the Energy Resource Interconnection Service (ERIS) Distribution Factor (DFAX) reduction proposal seems to be based on concern around market congestion and whether generation is able to be delivered to load. However, the Energy Resource Interconnection Service (ERIS) is NOT designed to provide the type and level of interconnection service that guarantees the interconnecting generator free from market congestion or the ability to be delivered to load.

• The market congestions are impacted by factors that are multi-faceted, for example, system conditions, weather conditions, transmission outages, and so forth. They need to continue to be addressed by MISO economic planning process through Market Efficiency Projects or Target Market Efficiency Projects (MEP), or by MISO integrated planning process, through Long Range Transmission Plans, rather than through generation interconnection process.

• The generator’s ability to be “delivered” to load need continue to be tested in the MISO Network Resource Interconnection Service (NRIS) evaluation and MTEP deliverability process. It should be noted that the DFAX threshold in the MISO NRIS evaluation is already set at 5%.

• In addition, MISO’s ERIS criteria has already captured additional impact beyond the 20% DFAX, for example, if the cumulative MW impact of the group of study generators is greater than twenty percent (20%) of the rating of the facility, then only those study generators whose individual MW impact is greater than five percent (5%) of the rating of the facility and has DF greater than five percent (5%) (i.e., power transfer distribution factor (PTDF) or outage transfer distribution factor (OTDF)) will be responsible for mitigating the cumulative MW impact constraint.

• Further lowering the DFAX from 20% to 10% under post contingency conditions universally for ERIS request could unfairly increase the cost for the interconnecting generators, while not providing the level of interconnection service that commensurate with this cost increase.  

• Increasing ERIS DFAX could also potentially create multiple small piecemeal solutions that could reduce the more cost efficient regional LRTP, MEP benefits to be below their B/C ratio threshold.

We are looking forward to working with MISO, Xcel, and all stakeholders to find the right solution for the issues raised.

SunEnergy1 does not support Xcel’s proposal of DFAX change in ERIS studies. The analysis is flawed as explained further in bullets below. This change is not just or reasonable. It will increase the overall cost of serving MISO load by preventing market competition. Further, it will greatly hamper renewable resource development in the MISO region and endanger MISO states’ renewable goals. It goes against the direction of FERC and DOE’s interconnection/transmission reform effort from ANOPR and i-2X. It is a U-turn from MISO LRTP and JTIQ initiatives which have been deemed by the entire country as the best practices to enable renewable resource’s development in meeting the nation’s clean energy target.

1. MISO ERIS criteria are already more stringent than other RTO’s

Among the 7 RTO in the US, only SPP and MISO require ERIS requests to make network upgrades to fix regular N-1 thermal constraints that are monitored/mitigated in the energy market through regular market clearing. ERIS resources (or Energy-only resources as called in some RTO) are considered “non-firm”, and market redispatch should be considered as valid mitigations. While MISO does not need to be consistent with most RTO's, MISO needs to be careful by going to the other extreme which will prevent healthy market competitions, distort market price signal for long term investment (resource siting), and endanger MISO states’ renewable goals.

2. Xcel’s congestion analysis is misleading and misplaced

Xcel’s congestion analysis is misleading because it is not related to the cost of serving MISO load. The congestion cost in the presentation is a result of more low-cost resources available. It is not regarding the actual cost of serving MISO total load. The overall MISO load is actually paying less due to market competitions. More importantly, in either case the load is served and Xcel has not demonstrated why this is a reliability issue rather than an economic issue. If the overall market sees economic benefits solving these constraints through transmission upgrades, it belongs to the overall transmission planning process rather than each individual new resource’s interconnection process. Please note, normally congestions provide healthy and necessary price signals for future resource and load siting strategy. 

3. Resource Adequacy issue description is inaccurate

Xcel’s description of the capacity accreditation of wind generation is inaccurate. Wind curtailment is “added back” to individual wind resource’s performance when its capacity factor was calculated. Besides, the scenario Xcel described does not cause resource adequacy reliability issues. For example, if a generation pocket can only deliver 100 MW from the pocket into MISO market, as long as MISO only certifies 100 MW NRIS from the pocket through NRIS study, MISO can safely count on 100 MW getting out of the pocket when MISO needs it. It does not have to come from the actual NRIS generator. It is expected that some of the NRIS generators can be displaced by ERIS generator as a result of market offers. 100 MW is still coming out from the pocket either way. That is how NRIS/RA is designed. NRIS allows a resource to participate in the capacity market, but is not a guarantee of energy market selection nor is it necessary.

SunEnergy1 appreciates the opportunity of providing feedback. SunEnergy1 urges MISO carefully consider all aspects and pay attention to the severe unintended consequences of the proposal.

Invenergy does not support the proposal to lower the ERIS DFAX from 20% to 10%. Though Invenergy wholeheartedly supports addressing economic congestion, we are not convinced that the proposed solution would effectively address the outlined problem.

Lowering the ERIS DFAX to address economic congestion is a substantive policy change with understudied and potentially significant consequences. Invenergy agrees with CGA’s assertion that the Generator Interconnection Process is not currently used as and is not meant to be the front line in addressing economic congestion. The MISO tariff already has far more targeted, effective, and timely solutions for addressing economic congestion. As the GIP is not well suited for addressing congestion, the outcomes of this proposal are unknown and require further vetting. The analysis provided to date is sparse and requires substantive speculation to draw any conclusions. This level of analysis is woefully insufficient for a change that will likely have considerable impacts on the Generator Interconnection Process.

Substantive policy changes require a Tariff filing. This proposal could substantially shift baseline transmission costs to interconnection customers, which may impact the viability of projects in MISO’s interconnection queue and future interconnection requests. Given the significant impact on interconnection customers, this policy is more appropriately addressed via an amendment to the MISO tariff rather than a change to the BPM.

If rushed through without careful consideration, the current proposal risks lowering flexibility in the queue amid a resource adequacy shortage, building out baseline transmission infrastructure through the interconnection process, and diverting limited time and resources from more targeted congestion solutions.

Invenergy asks that MISO address this policy question through a tariff change rather than just the BPM. Invenergy also supports MISO’s broader efforts at addressing congestion and asks MISO to prioritize such initiatives based on impact and expediency.

NextEra Energy Resources (NextEra) has analyzed the impact of the proposed changes to the MISO Energy Resource Integration Service (ERIS) Power Transfer Distribution Factor (Dfax) thresholds at recent MISO meetings. Our internally-performed study focused on generation projects included in NextEra’s 2021 Definitive Planning Phase (DPP) cycle queue submissions for the MISO Classic region. Nextera’s estimates indicate that lowering the Dfax threshold to 10% could increase interconnection costs by more than 15% and include a variety of high voltage upgrades. These results differ substantially from the results presented at the July 20 IPWG/PSC meeting.  One possible reason for the difference in our results is the geographic scope of our analysis. Due to the differences in NextEra and stakeholder presented results, as well as the lack of data provided by stakeholders, we recommend that MISO conduct an independent analysis of the impact of this change on interconnection customers across the MISO service territory. Additionally, MISO must independently justify changing from 20% to 10% because the current proposal is arbitrary and not justified by the presented analysis. We recommend that MISO contact the Southwest Power Pool (SPP) Transmission Working Group to learn more about the ERIS Threshold Study they discussed on August 1-2, 2022.[1]  The SPP study will show whether the congestion benefits to GI customers would be offset by the additional upgrade costs driven by reduced ERIS threshold and also what the impact will be based on a range of Dfax values. Comparison of historical results of the GI and ITP processes are being conducted in SPP to show whether cost shifting is occurring from the current ERIS threshold.

While we agree with stakeholders that there is a growing need to address congestion in the MISO footprint, we disagree that the modifying the Dfax threshold is the right approach to solving congestion. We also disagree with rushing this change ahead of the September 2022 DPP submission deadline.  Like other developers, we have been working on our 2022 submissions for months, and a change this close to the submittal deadline would severely disrupt the upcoming study cycle and the results for many clean energy projects desperately needed by NextEra’s customers.

NextEra has long history of operating renewable facilities in MISO. Our experience indicates that most congestion is related to real-time coordination of network and generation outages.  Our position is that curtailments driven by market coordination issues can be addressed most effectively through market reforms, not changes to the interconnection process.  One approach that we support for using to address congestion is to create a regional process akin to the TMEP used between MISO and PJM. We believe this approach is well tuned to address small, near-term upgrades that can address curtailment. Additionally, MISO should investigate the significant reduction in transmission equipment ratings that has taken place over the last few years. The lowering of ratings for conductors, transformers and other equipment has been a significant contributor to the increased congestion and has drawn the attention of the MISO Independent Market Monitor as well as other concerned stakeholders yet has not been a topic of discussion at any MISO stakeholder meetings.

As a second step in evaluating the proposed changes to the Dfax, MISO should also use PROMOD to conduct a congestion analysis to determine the likely patterns and causes of congestion. The snapshot in time used to capture overloads as part of the interconnection process is not adequate for addressing curtailment. This is because curtailment has a duration component that significantly drives the cost benefit analysis for alleviating the constraint. PROMOD is a reasonable analytical framework for conducting congestion analysis and should be used in coordination with deliverability studies to identify an enduring and equitable solution to addressing congestion. Another option that should be considered is network reconfigurations.

During the July 20 IPWG/PSC meeting stakeholders commented that changes to the DFax thresholds were needed to ensure that interconnection customers contribute their “fair share” to network upgrades.  NextEra disagrees with the characterization that interconnection customers are freeriding and not paying their fair share of network upgrades. NextEra firmly believes in the value of a beneficiaries pay framework for transmission network development.  However, changing the Dfax rating is not the correct approach because it is too coarse of an instrument for addressing the problem. There are other low cost solutions for consumers that can alleviate these overloads. We are open to a conversation with MISO, and the Transmission Owners on how to appropriately allocate deep network upgrade costs on the high voltage system that result from concurrent changes in load and generation. Finally, NextEra has been actively participating in the Federal Energy Regulatory Commission (FERC) Advance Noticed of Proposed Rulemaking (RM21-17-000) related to transmission planning and cost allocation and strongly believes that reforms to participant funding (who pays for what upgrades on the system) are needed to address what upgrades generation developers pay for and the role of proper transmission planning to facilitate future transmission needs on a more pro-active basis.

In summary, NextEra recommends MISO:

1. Conduct an independent analysis of the impact of changing the Dfax from 20% to 10% for the entire footprint
2. Initiate a study akin to the SPP Transmission Working Group that investigates the impact and benefits of different Dfax thresholds
3. Refrain from adopting any changes to the Dfax threshold ahead of the 2022 DPP Cycle
4. Investigate alternative solutions to address congestion with the MISO Independent Market Monitor[2]
5. Conduct stakeholder meetings to develop positions on all congestion related issues, not just Dfax change, in order to gain consensus on appropriate measures

Please see attachment with comments. 

MidAmerican Energy Company (MEC) thanks Xcel Energy and MISO for taking a deeper look into this topic.

MEC supports a re-evaluation of the 20% ERIS DFAX but requests MISO provide stakeholders more information to better understand the potential ramifications. While we realize an optimal DF threshold may not exist, MEC would appreciate MISO’s efforts to perform an indicative analysis comparing the number of incremental constraints on ERIS models at DF thresholds of 20%, 10% and possibly 15%.     

MISO could review the last several completed study cycles for each MISO region and summarize key findings such as:

1. Under the current 20% ERIS distribution factor, “x” facilities were shown as being impacted above the 20% cut-off (should match published study reports).
2. Under a 10% ERIS distribution factor, “y” facilities would have been shown as being impacted at 10%, 15% and 20% DF thresholds requiring mitigation.
3. Summarize facilities for each queue cycle for each generator. MISO would not have the incremental costs but knowing a) the increase in potential mitigations and b) distance proximity from the generator would be informative

1.                                          i.    For example, today a generator may impact a facility maybe one state away; could a lower DF result in impacted facilities two or three states away?
2.                                          i.    Note: results should only be shared to those with CEII access

4. It is assumed this raw data from the contingency analyses is still available from past MISO studies and that MISO could filter the results in 20%, 10% and even 15% distribution factors. 

Additional questions for stakeholders to make an informed decision:

1. A lower DFAX will create more constraints and will take Transmission Owners longer to evaluate mitigations. Has MISO consulted TOs to confirm there is enough time allotted in the latest MISO reduced GIP timeline (505 days reduced to 373 days) to account for the additional study needs?
2. Has MISO evaluated any other alternate solutions to the GI process that could resolve facilities known to bind in the MISO RT market but not the GI process? If so, can MISO share insight helping stakeholders understand why the proposed DFAX change is the most appropriate?

Implementing changes to DFAX without more analytical support that 10% (or another value) is more appropriate than 20% may result in complaints, further DPP study delays and/or other unintended consequences. MEC does not support implementation with the DPP-2022-Cycle without more information regarding the transition prior to DPP study start. 

The Mississippi Public Service Commission (MPSC) submits the following comments in response to MISO's request for feedback regarding the ERIS DFAX Overview and Xcel Reduction Proposal. 

• Should the ERIS DFAX cutoff for contingent constraints be lower from 20% to 10%? Please provide reasons for a yes or no response.

Yes. The MPSC supports lowering the DFAX cutoff for contingent constraints will be essential to contain increasing congestion caused by the rapidly growing volume of merchant renewable energy resources interconnecting to the MISO transmission system. Unless a lower DFAX is adopted, the very concept of ERIS, as an interconnection service that allows the interconnection customer to interconnect using existing firm or non-firm transmission system capacity on an as-available basis, becomes moot. Furthermore, this action is consistent with the MPSC’s position that generators should pay for their fair share of the cost of expanding the capacity of the transmission system in order to accommodate them without imposing costs for reliability and congestion management on the ratepayer.

• If yes, do you agree with the Xcel proposal to implement the lower cutoff when the LRTP Tranche 1 projects are included in the GI basecase?

The MPSC agrees with the Xcel proposal, as when the expected tens of GW of wind, solar, hybrid and battery storage projects unlocked by the 18 new LRTP Tranche 1 rojects apply for interconnection to the MISO system a sizable portion will likely elect ERIS to minimize development costs if these developers do not intend to own and operate the projects. The MPSC expects the volume of new interconnections, and the share of merchant projects to increase driven by the renewed availability of fiscal incentives if the Inflation Reduction Act of 2022 is signed into law.

At the July 20, 2022 joint meeting of the Planning Subcommittee and the Interconnection Process Working Group, MISO requested feedback by August 8th on MISO’s ERIS DFAX Overview and Xcel Reduction Proposal, specifically asking:

• Should the ERIS DFAX cutoff for contingent constraints be lowered from 20% to 10%? Please provide reasons for a yes or no response.
• If yes, do you agree with the Xcel proposal to implement the lower cutoff when the LRTP Tranche 1 projects are included in the GI base case?

Great River Energy’s (GRE) comments for this IPWG/PSC feedback request are below.

GRE recommends that the ERIS DFAX cutoff for contingent constraints be lowered from 20% to 10% when LRTP projects are included in GI study base case models. 

GRE is an off taker of existing wind resources. In addition, we plan to periodically contract new wind resources where the cost of network upgrades is passed on to GRE’s member-consumers in the resulting power purchase contracts. We have therefore taken into consideration the impacts that the proposed change would have our existing and new wind resources in our recommendation and see this issue from both a generator and load point of view.

Implementing the 10% DFAX at the same time as when the LRTP Tranche 1 projects are included in the DPP cycles will balance the impacts on new generators and load. Inclusion of the LRTP projects should reduce the cost and/or frequency of high voltage network upgrades, while the implementation of a 10% DFAX standard should result in increased mitigation of overloaded facilities, like terminal equipment and transformers that have previously gone unmitigated because there is not a single unit that meets the high 20% screening criteria. In short, new generators and load would pay a share of solutions to enable new generators to interconnect to the grid and increase the ability of them to transmit their energy to where it is needed.

Past unmitigated facilities that are the result of the 20% DFAX screening criteria are currently having a negative impact on the ability of low-cost generation to reliably serve load. The unmitigated facilities are also causing significant congestion between the generation and load. Failure to implement the 10% DFAX screening cutoff will increase the likelihood that the reliability issues and congestion levels currently being experienced will be repeated at even higher levels when the next round of generation enabled by the LRTP projects goes into service. 

GRE recommends delaying the inclusion of the LRTP projects in the GI study models until the ERIS DFAX discussion has concluded because the DFAX threshold has built congestion into the system that will lead to a disproportionate allocation of upgrades to generators in the queue prior to the inclusion of LRTP projects in GI study models, if the DFAX is lowered before these upgrades are included. Similarly, when LRTP projects are put in the GI study models, it is important to lower the ERIS DFAX to avoid oversubscription of the transmission capacity these projects will create.

The DFAX cutoff change is one of many holistic initiatives taking place to ensure future reliability while limiting the impact of congestion, and should be viewed as one solution among many where all stakeholders contribute to the overall solution:

• In the short term, MISO and stakeholders are developing ambient adjusted ratings programs, temporary system reconfiguration solutions, market participant funded upgrades, solutions to existing congestion including a possible creation of an internal Targeted Market Efficiency Project type and reviewing the auction revenue right (ARR) process. It should be noted that these short-term efforts will help mitigate current problems but will not address the root contribution of congestion from GI studies which is the high screening cutoff. 
• For the mid-term, MISO and stakeholders periodically review the DPP dispatch assumptions. The IPWG and PSC groups are currently discussing changing the ERIS DFAX criteria. Changing the ERIS DFAX is not going to address current problems but will help to avoid similar problems from showing up 3-5 years down the road when future generators that are coming online.
• In the long-term, the MISO Board approved LRTP Tranche 1 in July and anticipates approval of LRTP Tranche 2 in December 2023. These portfolios will help ensure future reliability needs are met and are expected to largely be in-service 8 to 10 years after MISO Board approval.

Pine Gate Renewables (PGR) appreciates the opportunity to provide comments on the Xcel Energy (Xcel) ERIS distribution factor (DFAX) reduction proposal. We support the comments filed by the Clean Grid Alliance (CGA) and would like to supplement the stakeholder feedback record with the additional comments provided below.

It is important to this issue to distinguish ERIS service from NRIS service and, further, to ensure that the thresholds applied during the study of each of these is consistent with the level of service intended to be provided under each service type. ERIS is an “as available” interconnection service, which, in MISO, is the minimum level of interconnection service required for a generator to participate in the wholesale market. This participation is again - on an “as-available” basis, which requires the generator to assume a certain level of unavailability or congestion.

Different from other markets, ERIS generators in MISO are subject to mitigate constraints identified in ERIS studies if the impact of the generator on the identified flowgate meets a distribution factor threshold under system intact and contingent conditions. The upgrades built for ERIS constraints do not grant the study generator firm transmission capacity rights or aggregate reserve capacity on the grid. For this reason, if a generator is responsible for said transmission upgrades and still not entitled to firm transmission capacity rights or aggregate reserve capacity, the generator’s contribution to the overload must be substantial.
Relative to the contribution by the generator that must be met to assign upgrade costs to a generator, the result of which is still an “as available” service, there is an established precedent historically in SPP, MISO, and other markets where it has been determined that a 20% distribution factor on an N-1 flowgate constitutes a fair degree of substantiality. Again, this threshold should be substantial as the generator is receiving no firm transmission capacity rights or aggregate reserve capacity despite their contributions to the grid. Xcel Energy made several statements regarding the small amount of capital that would be needed to address these issues. However, consideration must be given to who would benefit from those upgrades and it is not the generator, which still has interconnection service on a solely “as available” basis.

Xcel argues that there are thermal violations in ERIS studies that go unmitigated because there are no projects that meet the DFAX threshold criteria as established by MISO to mitigate the constraint, and, as a result, this creates real-time congestion in the system. However, the presentation did not offer the level of detail, technical information, or analysis that would be necessary to support such a significant change being implemented across the entirety of the MISO footprint. As well, it did not address the potential that prospective generators would be responsible to address additive loading from existing generators that is currently above 10% without a look back or benefits evaluation and allocation.

In general, PGR respectfully submits the following major concerns, observations, and recommendations to MISO relative to its evaluation of Xcel Energy’s proposal:

• The program MISO uses to perform ERIS studies reports all the transmission interfaces with a final AC% loading above a specific threshold, which, historically, has been 85%. This report includes each study generator’s DFAX on the identified flowgate, and the projects that meet cost allocation criteria.
• To comprehensively evaluate the relationship between the DFAX and congestion, an effort should be initiated to conduct an ERIS study using the same peer reviewed input files that MISO uses to perform ERIS interconnection studies to produce a constraint report for the entire MISO footprint. From this constrain report, the flowgates where no project meets cost allocation criteria for mitigation can be identified and compared to the binding constraints identified in an economic congestion market simulation study that should also be performed in coordination with MISO. Where the same constraints are consistently identified in both studies across the MISO footprint, there should be further evaluation to confirm whether there is a direct cause-and-effect relationship between the DFAX threshold and economic congestion.
• Xcel’s proposal did not seem to account for or otherwise consider the differences between economic market simulation studies and ERIS interconnection studies. When performing an ERIS interconnection study, generation is dispatched at maximum output per fuel source and that generation is forced against existing and prior-queued generation in the MISO footprint. Additionally, N-1 P1-P7 NERC-TPL-001-5 events are simulated in ERIS studies. The assumptions and conditions under which an economic market simulation study is performed are vastly different. The impact of these differences in case composition and study methodology cannot be overstated and must be a critical factor in any decision-making on this issue. Without a comprehensive evaluation such as is recommended above, the very nature of these studies militates against Xcel’s proposal as it is unlikely that the constraints identified in congestion studies would also show up in interconnection studies – regardless of the DFAX threshold utilized.
• The current proposal will significantly burden generators to address loading solely for the benefit of load service. This alone violates the “beneficiary pays” principle that has been foundational to cost allocation for decades. To enact such a draconian change without any, independent, comprehensive evaluation to fully identify the association and relationship between the DFAX threshold and real-time economic congestion is not defensible. At a minimum, evaluations should confirm that this issue is occurring system-wide, that there is a cause-and-effect relationship between the ERIS DFAX threshold and economic congestion, and what the magnitude/scope of that effect is across the MISO footprint, independent of other factors known to cause and worsen economic congestion.
• The current proposal does not consider the previously well-established principle that congestion should be addressed through real-time or near- real-time processes such as outage coordination, facility rating methodologies, operational guides, implementation of grid optimizing solutions (such as SmartWires), and market efficiency projects identified in MTEP processes. This is where congestion has historically been addressed and where the Independent Market Monitor is currently proposing improvements to address congestion -not through generation interconnection. Where congestion is addressed is essential to a well-balanced and high-functioning market as congestion is not the only consideration in whether a market is efficient. In fact, as important are the energy costs, which offset congestion costs. Xcel’s own presentation showed that, where congestion occurred, energy costs were often lower than elsewhere within the footprint.
• These are important considerations as all aspects of the market must be optimized and balanced.
• Any change to the DFAX threshold that would tag new generator with network upgrade costs that remedy existing loading over that new threshold must include a mechanism to appropriately allocate costs. Prospective generators must not be held fully responsible for addressing existing loading that is greater than the newly established threshold without the costs for the existing loading being appropriately allocated to all causes of the loading.
• There are existing, known deficiencies in the current planning processes and modeling that must be addressed to ensure that interconnection customers are not getting tagged for network upgrades that are primarily alleviating existing system characteristics. For example, the current processes and modeling have typically failed to mitigate the impacts of 200kV and above outages on lower voltages. Based off Xcel’s presentation, it can be inferred that dropping the MEP voltage threshold to 100kV and above would result in discernible congestion improvements. Changes to these processes and modeling or changes to the current generator interconnection study process for ERIS must be incorporated to remedy these deficiencies prior to implementation of a lower DFAX threshold, e.g., studies should be conducted that include lower voltage levels to see if an observed loading remains. Without such changes, existing issues will merely be assigned to generators because gaps and deviations between the various and sundry planning and modeling processes failed to fully identify these existing issues previously.
• Such a process, again, creates concerns that the “beneficiary pays” principle is not being applied.

PGR appreciates MISO’s consideration of these comments, and we look forward to further discussions on this proposal.

Otter Tail Power supports the feedback submitted by the Transmission Owners. OTP would also like to offer a few additional comments:

Fundamentally, the DFAX threshold builds congestion into the system by effectively disregarding constraints caused by new generator interconnections. In real-time operations, this causes both economic and reliability concerns. The economic concerns are readily apparent with the large amount of congestion recently appearing on the MISO system. The reliability concerns include resource adequacy concerns, where generation assumed to be deliverable is actually not deliverable due to congestion, and reduced operational margins and flexibility, especially under extreme weather conditions.

OTP also sees the proposal as a continuation of the efforts to align the MTEP and Generator Interconnection Processes that MISO stakeholders undertook with the Coordinated Planning Process Task Team. The MTEP process has no DFAX cutoff for constraints. While a 10% Generator Interconnection DFAX cutoff is still not fully comparable with the 0% MTEP DFAX cutoff, it would be a great improvement over the current 20% value.

BW Solar does not support the reduction of DFAX constraint criteria for ERIS from 20% to 10%.  Xcel is raising important issues, especially around curtailment, BW Solar does not believe that changes in the interconnection studies are the proper place to address day-ahead and real time congestion issues.  There is some overlap between interconnection studies (ERIS) and economic dispatch, but they are modeling two different ideas.  ERIS studies are looking at a single snapshot of the system, with new generation dispatched at prescribed levels and existing generation back downed to maintain a balanced system.  There is no cost data in dispatching units for an ERIA study, just broad technically class limits.  Additionally, line outages are limited in the ERIS studies, but are a huge driver of economic congestion.

Economic dispatch (day ahead and real time), the cost differential between different sources is driving the congestion, and there are significant impacts from transmission and generation outages.  This is also modeled hourly (or 5 min increments for real time) and incorporates ramping limits and other time dependent variables.  The differences between these two modeling efforts lead to different outcomes, one a static hour look and the other a dynamic time series model.

BW Solar does support easing congestion across the market, but believes that transmission improvements via the MTEP process are a better way to handle existing and future congestion.  Economic congestion fixes should be evaluated against similar modeling (looking at an hourly dispatch), rather than an hourly snapshot evalution for reliability. 

No, the ERIS DFAX cutoff should not be lowered.

No credible evidence has been provided to show that MISO study generators are the source of real-time congestion issues. As this link has not been shown, generators should not be allocated costs for a solution, including additional Network Upgrades found at lower DFAX thresholds.

We further support the feedback from Clean Grid Alliance.

ENGIE North America, Inc. (“ENGIE) appreciates the opportunity to submit these comments in response to the Xcel Energy ERIS Distribution Factor (DFAX) reduction proposal

ENGIE is a subsidiary of ENGIE SA, a global energy company and a leader in low-carbon energy systems with a mission to accelerate the transition towards a carbon-neutral world. Globally, ENGIE owns and operates over 100 GW of power generation and is a leading energy supplier to commercial and industrial customers. In the United States, ENGIE owns and operate over four GWs of renewable generation and battery energy storage.

ENGIE encourages MISO to defer action on the ERIS DFAX proposal until a formal stakeholder process is conducted and there is a comprehensive MISO footprint-wide study that can identify the DFAX threshold for ERIS to be a direct contributor to congestion.

ENGIE supports comments submitted by the Clean Grid Alliance and raises the following concerns with the ERIS DFAX proposal for MISO’s consideration:

An independent study that evaluates multiple contributors to congestion across the entire MISO footprint is required prior to MISO considering changes to the ERIS DFAX. Study models and results must be made available to generation interconnection customers and ample time should be allowed for a diligent stakeholder review of the study models and results

The Xcel study did not provide sufficient data for generation interconnection customers to validate that there is a true link between current DFAX threshold levels and problematic congestion. Other causes of congestion are present on the MISO system that have been identified by the MISO Independent Market Monitor (IMM) in the 2021 State of the Market Report, none of which were included the ERIS DFAX threshold. Other causes of congestion are not evaluated in the study and the study data provided does not demonstrate DFAX as the one variable impacting congestion. Generation interconnection customers have no visibility into the base case information used by Xcel on the lines studied.  There is also no ability to interpret how Xcel arrived at the DFAX threshold levels and associated those to congestion and related costs. In addition, changes to the ERIS DFAX threshold levels would impact the entire MISO footprint yet only impacts to MISO West were studied. Unless MISO is intending to apply separate interconnection and planning policies to the MISO West region a study that evaluates impacts to the entire footprint is necessary to avoid unintended consequences.

Changes to ERIS DFAX policy should require a tariff change

Changes to ERIS DFAX threshold would have a significant impact on generation interconnection and would potentially hinder the growth of renewables in the MISO states. Reducing the DFAX threshold to the level proposed will create billions of dollars in additional upgrades that generation interconnection customers would be required to build. For a change to the study processes this significant, it is not appropriate to only consider a BPM change, this decision must be thoroughly vetted through a tariff change process. Setting future precedence that a BPM change is appropriate to address changes of this magnitude would be very concerning for generation developers and would create significant uncertainty in planning and investing in long-term projects in the MISO region.

Market enhancements should be targeted first to address real-time congestion

There are more efficient means to address real-time congestion than attempting to do so by arbitrarily applying billions of dollars of additional network upgrades onto generators that are costly, lengthy, and uncertain and may not ultimately address the major contributors to congestion. MISO should first evaluate recommendations from the IMM for market enhancements and continue to pursue initiatives already underway. 

Conclusion

There is simply not enough data for the MISO or stakeholders to determine that the ERIS DFAX threshold has a clear cause/effect relationship with real-time congestion. An independent, transparent study that covers the entire MISO footprint and evaluates multiple causes of congestion must be pursued before changes are proposed. Changes to ERIS DFAX will have far reaching consequences to generation interconnection and must be thoroughly vetted through a tariff change process not a BPM change. More efficient market enhancements should be pursued first prior to proposing changes to the planning and interconnection processes.

ENGIE appreciates the opportunity to submit comments on this very important issue and MISO’s consideration of recommendations included herein.

Sincerely,

/s/ Margaret Miller

Margaret Miller, Director, Government and Regulatory Affairs

1360 Post Oak Blvd. Houston, TX 77056

(916) 342-6311 

margaret.miller@engie.com

Thank you very much for the opportunity to comment and thank you Xcel for the concern and effort. 

EDF Renewables (EDFR) answer to the question:

• No, ERIS DFAX cutoff for contingent constraints should not be lower from 20% to 10% without a better study and the application of concurrent near-, mid-, and long-term efforts, see below for offered examples.
• Unfortunately, there isn’t enough data to support or refute such a drastic change and/or compare it with alternatives
• How will this help/hurt in the long run with transmission planning, subsequent GI clusters, etc. …?
• In theory, a reduction in DFAX should assist with transmission planning and prospect of future congestion and resource operation, at expense to first few GI clusters’ assigned costs
• Let’s not crush and destroy an entire cluster with a big, 50% reduction step, to get that unknown, long-term improvement
• There needs to be a more concerted and comprehensive study done to better identify if halving the DFAX to 10% is appropriate and what effect it will have on expected cost and identification of upgrade needs, but
• If time is needed to study and identify what the correct DFAX percentage should be in conjunction with LRTP Tranche 1 transmission project inclusion in DPP models, then EDFR suggests delaying projects inclusion till the DFAX % has been identified
• EDFR believes a DFAX step reduction to say 15% (25% reduction) in conjunction with the inclusion of LRTP Tranche1 in the MISO Generator Interconnection Process models, would be acceptable while developing and using other tools to address existing issues.

EDFR agrees DFAX is a reasonable tool, lowering the DFAX, to address system upgrade needs prescriptively and preemptively to better serve society and ratepayers with reasonable cost and clean energy that we all want and deserve, and that doing so in conjunction with the expectation of LRTP Tranche 1 implementation and energization is an apropos time. The application of changes to parameters and approach(es) must be done as one of the tools and a step reduction of the DFAX parameter to 15% is more appropriate.

EDFR strongly agrees that something needs to be done to address pre-existing conditions in the starting cases used in the MISO Generator Interconnection Process, as well address the unusually high and prevalent amount of congestion on the MISO system. The congestion levels are untenable, perverse, and unacceptable, for what should be an efferent market that is meant to provide appropriately and reasonably priced energy to society and rate payers. Underrepresented ratepayers should not have to expect to accept this level of congestion cost going into the future. To address this situation, that can be expected to effect more of the MISO footprint soon, there needs to be a multi-pronged approach that is applied concurrently.  

Posthaste, MISO need to:

• Near-term, embrace GETs and transmission reconfigurations specifically, for immediate or near application
• Mid-term, apply a TMEP type of approach to internally address past and chronic congestion in a quick and cost-effective ways
• Mid-term, address transmission credit issue for participant funded upgrades to offer just ROE for funding upgrades by non TOs
• Mid- and Long-term, adjustments to Generator Interconnection Process study parameters, including ERIS DFAX
• Long-term, economic planning in coordination with the reliability based LRTP
• Long-term, continue with LRTP with Tranche 2, and similar efforts as JTIQ  

Thank you again for this opportunity,

Tem

Savion, LLC (“Savion”), a Shell Group portfolio company operating on a stand-alone basis, is an industry-leading utility-scale solar and energy storage project development company.  Savion would like to thank MISO and Xcel for the opportunity to provide comments on the proposed ERIS shift factor reduction under contingent conditions from 20% to 10%.

We acknowledge that we are seeing problems such as increased market congestion and issues in GI studies that aren’t being captured due to various study criteria.  These problems are not new and are evolving with the shift towards renewables.

As was noted in the discussion, a distinction needs to be made between reliability and economic issues, criteria, and studies.  Xcel very clearly has stated that the primary driver for this proposal is to capture more issues to help reduce congestion.  That in itself is an economic driver, not a reliability driver.

The very definition of ERIS states that the generation may inject on an as-available basis and many markets don’t require upgrades at all for ERIS service.  PJM and ERCOT are a couple of examples.  By the very definition of ERIS, RTOs allow their markets curtail generation as necessary, which can lead to curtailment.  It’s a fundamental risk all generation takes while in operation with ERIS

While decreasing the ERIS threshold to 10% may capture more upgrades, we haven’t seen evidence that it is the correct solution.  The MISO GI studies use a fuel-based dispatch which is very different than a market or economic based dispatch and can and will lead to very different power flows on the system.

We heard several times that the best time to enact this change is when the LRTP upgrades are placed in the model.  While this is likely to help some of the larger pre-existing system issues, it will not address all issues and numerous constraints will remain.  As such, if implemented we would request that MISO perform a one-time study to identify and capture all overloads under the 10% criteria change and propose upgrades. MISO should also identify appropriate funding mechanisms outside the GI study process to fund such upgrades.  This would prevent later queued generation from being saddled with more upgrades simply due to criteria change when earlier generation received a free pass on the issues.

In summary, we agree there are issues that should be addressed on the system and appreciate MISO’s consideration of the issues.  We do however think a more wholistic approach is warranted and if this change is adopted, a mechanism needs to be put in place to first fix any pre-existing issues that would be shifted to later queued generation, costs that wouldn’t have occurred but for the criteria change.

Thank you for the opportunity to comment on this important topic.

WPPI Energy believes that the Generator Interconnection process should be designed to prevent significant deterioration in congestion conditions as new interconnections occur, but that it has not satisfactorily achieved this in recent years.  We suspect that the relatively high current ERIS DFAX cutoff plays a significant role, and that reducing this from 20% to 10% would be an improvement that would still provide protection for interconnections with small impacts on constraints.  While we support this change, we think it would be appropriate for MISO and IPWG stakeholders to consider information on the likely impacts of both the current policy and proposed change before this is returned to the PAC.  This is particularly true given the level of concern about the proposal voiced by generation-developer interests.

WPPI wholeheartedly agrees with Xcel’s proposal to align a DFAX-cutoff reduction with inclusion of the Tranche 1 projects in the basecase, as we feel this is the fairest and least disruptive approach, since the two changes will tend to partially offset.

Xcel Energy supports reducing the ERIS DFAX cutoff for contingent constraints from 20% to 10% and agree that the lower cutoff should be implemented when the LRTP Tranche 1 projects are included in the GI basecase.  Xcel Energy believes that the lower DFAX cutoff will enhance the reliability and economic benefits provided by the LRTP Tranche 1 projects while not unfairly burdening the interconnection customers with additional significant costs.  The DFAX change will identify and result in the mitigation of overloaded facilities in the interconnection studies that have previously gone unmitigated.  Past unmitigated facilities are currently having a negative impact on resource adequacy and the ability of generation to serve load in times of need.  The unmitigated facilities are also causing significant congestion.  Failure to implement the 10% DFAC cutoff value will increase the likelihood that the reliability and congestion currently being experienced will be repeated at an even higher level when the next round of generation enabled by the LRTP projects goes into service.  The DFAX cutoff change is one of many initiatives supported by Xcel Energy to ensure future reliability, while limiting the impact of congestion.

Apex Clean Energy (Apex) appreciates the opportunity to provide comments on the ERIS Dfax reduction proposal currently being discussed at the Interconnection Process Working Group.  Without much more analysis and information Apex cannot and does not support the current proposal.  We appreciate the interest in reducing congestion, but the current proposal has not been shown to be, and probably is not, the proper solution.

The ERIS DFAX cutoff for contingent constraints should NOT be lowered from 20% to 10%. There are several reasons why AES Clean Energy cannot support this proposal at this time, chief among them is the lack of rigorous analysis to justify this change and the insufficient time for stakeholders to fully vet this proposal against other potential solutions.

First, while many stakeholders recognize that congestion is an issue on the MISO system, there has been insufficient evidence to prove that interconnecting ERIS resources are a key source of this congestion to warrant this proposed change. In the 2021 IMM State of the Market report cited to demonstrate the growth in wind curtailments, much of this curtailment occurred during the spring and winter periods when system loads are lower[1]. It is just as plausible that this curtailment issue is the result of the market model favoring baseload power even in off-peak periods, and that this type of congestion might better be solved through revisions to the market dispatch model. Alternatively, this increased curtailment could also point to the need to further incentives the co-location or integration of energy storage onto the system to help alleviate this curtailment or congestion and enable MISO to dispatch this energy at more opportune times. Thus, this change may actually further exacerbate congestion by making it more costly to integrate energy storage onto the grid.

Second, there has been a lack of rigor in the “study” results provided by Xcel to help justify their proposal. Their study was completed on only a subsection of the MISO system, and it still unclear from their materials exactly how this study was conducted. Xcel should provide stakeholders with a clearer explanation of how their study was conducted to allow stakeholder to better evaluate their results. It is also unclear from analysis done only in the Xcel territory how pervasive this problem is and what its impact would be across the MISO footprint. Before stakeholder can reasonably consider this proposal, MISO should conduct a fuller analysis on the impact of this change across its footprint.

Third, AES Clean Energy does not believe that the MISO planning process and ERIS interconnection service was designed to eliminate congestion in the Day Ahead and Real Time Markets. The MISO planning process should be to identify the reasonable amount of transmission buildout necessary to ensure the mandated level of reliability, not upgrading constraints for every possible contingency scenario or ensuring some level of economic dispatch of the resource. Therefore, it is unreasonable to modify the Dfax level utilized to determine ERIS network upgrades in order to solve economic congestion issues. Additionally, if congestion really is as pressing of a problem that Xcel is claiming to justify an expedited stakeholder process, then implementing the solution through the interconnection process, where you would not see the perceived benefits for another 3-5 years minimum also does not seem like the most effective solution to the problem.

Fourth, MISO should extend this stakeholder process to allow parties sufficient time to fully understand the issue at hand and whether this proposed solution is the most efficient or whether this problem would be better addressed using modifications to the market dispatch, investment by transmission owners in other grid enhancing technologies, such as dynamic line ratings or power flow controls, or any of the other proposed solutions listed in the IMM’s report as an alternate solution to the identified congestion issue[2]. Xcel has advocated that this change should be implemented when the LRTP’s are incorporated into the base case. Based on prior stakeholder discussions, it is AES Clean Energy’s understanding that the LRTP Tranche 1 projects will be incorporated into the base cases starting in cycle 2022, which the kick-off calls are expected to start in December. However, given the multi-year delays in the interconnection study process across several regions, it is unlikely that the actual study of cycle 2022 project will begin by the end of the year. Therefore, MISO would have time to extend this stakeholder process to allow for the necessary time and vetting stakeholder should be given to evaluate this change since it is unlikely that MISO will be starting the 2022 study cycle in many regions in the near future. Additionally, during the stakeholder call, Xcel also express some support that this change could wait until 2023/2024. Stakeholder should be given the time necessary to consider all the consequences of these changes, and whether this change could lead to further delays in the interconnection process, and a better understanding of cost impact to projects.

Finally, AES Clean Energy advocates that this proposal should be submitted to FERC for review and approval. While the Dfax thresholds are only specified in the BPM language, AES Clean Energy argues that this change represents a material change in rates through the increased opportunity to be assigned network upgrade costs and that FERC should be given the opportunity to rule whether this change is just and reasonable. Additionally, this proposed change is in some ways revising the interconnection services being offered under ERIS that FERC should be given the opportunity to decide whether this change would contradict any of its prior orders, such as Order 2003. Furthermore, FERC should be allowed to weigh in on whether requiring new generators to fund upgrades to relieve congestion caused in part by existing generators does not violate the long-established principle that beneficiaries pay.

Advanced Energy Management Alliance (“AEMA”) [1] respectfully submits the following comments to the MISO Interconnection Process Working Group (“IPWG”) on the feedback request made by MISO at the July 20, 2022, meeting of the IPWG.[2] AEMA is a trade association under Section 501(c)(6) of the Federal tax code whose members include national distributed energy resource companies and advanced energy management service and technology providers, including demand response (“DR”) providers, as well as some of the nation’s largest demand response and distributed energy resources. AEMA members support the beneficial incorporation of distributed energy resources (“DER” or “DERs”), including advanced energy management solutions, into wholesale markets as a means to achieving electricity cost savings for consumers, contributing to system reliability, and ensuring balanced price formation. These comments represent the collective consensus of AEMA as an organization, although they do not necessarily represent the individual positions of the full diversity of AEMA member companies.

At the July 20^th meeting of the IPWG, Xcel Energy proposed changes to the Energy Resource Interconnection Service (ERIS) Distribution Factor (DFAX) that would move from a 20% to 10% DFAX threshold, which would “have a positive impact on future congestion and curtailment.”[3] MISO has requested feedback on two questions and AEMA offers the following responses:

• Should the ERIS DFAX cutoff for contingent constraints be lower from 20% to 10%?  Please provide reasons for a yes or no response.

No. MISO should not lower the ERIS DFAX cutoff for contingent constraints from 20% to 10%. AEMA encourages MISO to invest more time understanding the root causes of overall congestion and examining other alternatives to address existing sources of congestion. Although Xcel has highlighted some specific areas of congestion, the solution proposed by Xcel is not fully vetted for the impacts on project developers, price formation, and future interconnection customers. For example, if the congestion spots identified by Xcel had been changed, how much would the interconnection project costs have increased? It is also unclear what projects might have become uneconomic because of the change in the project costs required to satisfy this tightened DFAX requirement. Without the new projects, would the overall operational costs of MISO been increased because some renewable projects would not have been built? These questions should be part of the overall examination of the impact of any change. 

By its nature, ERIS is not intended to be firm transmission service, so the congestion and potential for curtailment are a risk that an interconnection customer seeking ERIS accepts. An interconnection customer that is concerned about ensuring firm delivery should request NRIS service to avoid these risks. The Xcel proposal would potentially create further barriers to development of much needed projects in the MISO region.

In the 2021 State of the Market Recommendations, the Independent Market Monitor (IMM) has suggested multiple recommendations to help with congestion relief.[4] These recommendations include exploring the use of adjusted transmission ratings, deployment of economic transmission reconfiguration options, adopting economic criteria to coordinate scheduling of generation and transmission outages, and improving the process to define and coordinate market to market constraints. These recommendations should be considered as part of an overall solution. 

AEMA would encourage MISO to examine the potential for Alternative Transmission Technologies, including Grid Enhancing Technologies (GET) as part of the current FERC NOPR for possible solutions to reduce congestion.[5] As pointed out in the FERC NOPR, Alternative Transmission Technologies may have more efficient or cost-effective ways to serve future needs.

Additionally, MISO should look at expediting the utilization of Distributed Energy Resources (DER) to potentially provide mitigation solutions to network upgrades. The use of DER to reduce transmission congestion is well established and has been shown to help shift the system load profile, increase capacity factors, and reduce congestion on both distribution and transmission.[6]^,[7]

Given the multitude of options for addressing transmission congestion, potentially with much lower costs of implementation for customers, AEMA encourages MISO to explore the costs and benefits, both quantifiable and subjective, to find the most efficient process for managing overall congestion without stifling interconnection, project development, and renewable integration in the MISO region.   

• If yes, do you agree with the Xcel proposal to implement the lower cutoff when the LRTP Tranche 1 projects are included in the GI basecase?

AEMA does not support the Xcel proposal, so AEMA does not agree with the Xcel proposal to implement the lower cutoff when the LRTP Tranche 1 projects are included in the GI basecase. 

AEMA appreciates MISO’s consideration of these comments as part of the examination of congestion issues within MISO. We welcome any questions, and encourage you to contact either Katherine Hamilton, Executive Director of AEMA, or DeWayne Todd, representative of AEMA, should you wish to discuss with AEMA members.

Respectfully Submitted, 

Katherine Hamilton
Executive Director, Advanced Energy Management Alliance
Katherine@aem-alliance.org
202-524-8832

or

DeWayne Todd
DDT LLC
dewaynetodd1297@gmail.com
812-573-8052