IPWG: ERIS DFAX Reduction Proposal (PAC-2022-3) (20220815)

EDF Renewables (EDFR) appreciates the opportunity to provide comments to MISO and IPWG on proposal to lower the generator interconnection Distribution Factor (DFAX) threshold to identify further reliability upgrades to assigned to applicable generation, in addition to address appropriate amounts of future congestion.

EDFR supports MISO’s opinion on reasoning and logic for DFAX threshold reduction bringing positive benefits to MISO footprint and bulk electric system for better production and delivery of energy. A reduction would identify earlier needed system upgrades and potential allow for further sharing in the cost. This would facilitate a better and earlier provision of increased benefits to served system load.

EDFR believes this reduction would be responsive to Organization of MISO States (OMS) and applicable State Commissions concerns, that interconnection customers pay their share, and that the appropriate and demanding load pay.  

We are encouraged and supportive of MISO’s successful LRTP Tranche 1 portfolio of transmission projects and expected Tranches to come. LRTP was developed with the understanding and expectation that incoming generation would pay its part of the under build and onramps, along with interconnection facility costs. EDFR believes that a DFAX reduction for Energy Resource Interconnection Service (ERIS) would assign projects costs earlier and explicitly providing for generation paying our share of the need for more transmission. This seems to be an equitable, fair, and simple way for generation interconnections to share in the costs to complement and complete the LRTP portfolio intent.   

EDFR does not have any feedback or questions on the preliminary MISO analysis provided for and at the August 15, 2022, Interconnection Process Working Group (IPWG) meeting.   

Sincerely,

Tem

The MISO Transmission Owners(1) support the proposal to lower the ERIS DFAX from 20% to 10%.  The Owners believe that implementing the ERIS DFAX reduction in generator interconnection studies, starting with the DPP study model for the cycle in which LRTP upgrades are added, will have a positive impact on future congestion and curtailment while not unfairly imposing significant cost burdens on the interconnection customers.

(1) MidAmerican Energy Company does not join the Owners in these comments. 

CGA Comments to the IPWG on The Proposal to Lower the Generator ERIS DFAX
September 8, 2022

Clean Grid Alliance appreciates the opportunity to provide comments to MISO and the IPWG on the proposal to the lower the generator interconnection DFAX threshold so that additional upgrades can be assigned to generators, for the purpose of addressing congestion. 

We look forward to MISO’s response to the extensive comments we (and other stakeholders) previously submitted, but that MISO did not review or take into consideration prior to proceeding with a proposal. We do not support MISO’s approach in considering input from only one stakeholder, and encourage a more inclusive and collaborative process going forward. 

For reference, below are our previous comments: 

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Clean Grid Alliance Comments on ERIS DFAX Reduction
August 8^th, 2022

Clean Grid Alliance appreciates the opportunity to provide comments on the Xcel Energy ERIS DFAX reduction proposal. 

While we appreciate the interest in reducing congestion and support efforts to better achieve market optimization, we do not support the current proposal.  As an initial comment, there has been a lack of analysis and information to correlate the DFAX percentage to actual market congestion - either within the XCEL footprint or elsewhere in the MISO footprint.  Moreover, different causes of real-time congestion have been identified by MISO’s own Market Monitor – of which generator interconnection ERIS DFAX was not identified.  

Given the lack of information/data combined with the significant impact that lowering the ERIS DFAX would have on the MISO generator interconnection process, we are compelled to strongly oppose the current proposal until sufficient information and data is provided to ensure the proposal is relevant, not redundant to already advanced policy initiatives intended to address congestion (both near-term and over the long-term), and that the consequences to MISO’s generation interconnection process and secondary impacts to other processes, are justified. In particular, it would be detrimental to all stakeholders, MISO, the Transmission Owners, load, and Generator Interconnection Customers to rush to implement a solution that could adversely impact the efficiency and effectiveness of future resource interconnections and that, ultimately, does not achieve the intended objective of lowering real-time congestion.  This outcome would be especially damaging to the stakeholders given the looming resource adequacy issues within the MISO Balancing Authority and the need to interconnect a significant amount of generation in the very near term. Further, as stated earlier, the correlation between DFAX percentages and real-time congestion was not identified in the market monitor’s 2021 report, which also contains other recommendations to better optimize the market to reduce real-time congestion. At a minimum, this proposal should be considered only after a thorough evaluation of the market monitor’s recommendations is conducted and provided to stakeholders.

Overall, the proposal to reduce the ERIS DFAX threshold is:

• Unfounded/Unjustified –ERIS DFAX levels have not been demonstrated to be a direct cause of congestion on the system, while other causes (with much more efficient solutions) have been identified by the MISO Independent Market Monitor
  
  
• Redundant to two other initiatives already underway in MISO’s planning and market processes to reduce congestion.  These efforts began in June 2021 and will specifically target congestion both near term and into the future.  The DFAX proposal does not have a clear cause/effect relationship with real-time congestion, will cast a wide net negatively impacting many generators , may not have the intended effect, but will have significant system-wide unintended negative consequences. 

• A deviation from long-standing precedent and creates new interconnection requirements not currently contained in the Tariff–The purpose of generator interconnection studies has been to reliably interconnect, not to ensure a “congestion-free” interconnection. Reliable interconnection is the genesis of and current foundation for the studies and processes underlying generator interconnection.  ERIS service is, by its nature and definition, an “as available” service.  The nature of ERIS service assumes some risk and the potential for curtailment due to market congestion.  This is where the competitiveness and efficiency of market and operating processes and mechanisms enter the equation and optimize overall cost.  This proposal threatens to undermine the historic principles and foundations of generator interconnection and a competitive market. 

I. ERIS DFAX has not been demonstrated to be a direct cause of congestion. 

The Xcel Energy presentation advocating to lower the ERIS DFAX threshold referenced the MISO Independent Market Monitor (IMM) 2021 State of Market Report that describes the rising costs of congestion. The IMM report identified a number of significant contributing factors to real-time congestion on the MISO system, none of which related to ERIS DFAX levels in the planning or generator interconnection processes and all of which are solely under the control of MISO transmission owning members, such as Xcel Energy:

The report attributed increased congestion and costs as follows:

• Real-time congestion in 2021 was higher than optimal because several key issues continue to encumber congestion management in MISO, including: 

• Usage of very conservative static ratings by most transmission operators; 

• Limitations of MISO’s authority to coordinate outages; 

• Not utilizing opportunities to reconfigure the network to mitigate severely binding constraints; and 

• Issues in defining and coordinating market-to-market constraints. 

When asked if the  recommendations of the IMM have been followed through with, or even initiated as solutions to congestion, no response was received from MISO and the response from Xcel Energy was unclear relative to the specific improvements cited here. 

Xcel made assertions in its presentation that the DFAX threshold for ERIS is contributing to real-time congestion but failed to present its analysis or data of real-time congestion, constraints, or related costs that directly correlated to the DFAX threshold, nor acknowledge the IMM identified factors-- their prevalence, timing, e.g., daily, monthly, seasonal, etc., or duration, e.g., minutes, hours, days. 

• Congestion can be identified in a variety of time horizons. Real-Time congestion, however, occurs as a result of variety of system conditions that are present during real-time operations, both planned/known and unplanned/unknown.  System conditions that contribute to congestion and constraints in real-time include overly conservative facility ratings, schedule deviations, forced transmission and generation outages, transmission and generation derates, and unexpected increases in interchange, load/demand deviations, among others. Without data and analysis that removes the impacts of these directly correlated causes of real-time congestion, it is unclear how Xcel associated the DFAX threshold with congestion, and moreover, how it is ensuring that its proposed solution is appropriate to most efficiently address congestion concerns.

• It is noted that the IMM recommended improvements to outage coordination, facility ratings, and transmission reconfiguration activities, issues that are more typically associated with changes in real-time congestion.

• Understanding the difference between temporary and longer-term congestion, MISO and the Transmission Owners should FIRST actively evaluate the recommendations for improvement to the market and transmission congestion management made the IMM as well as generally look to their real-time toolbox to identify whether there are feasible real-time focused solutions that would provide the needed relief in the needed time frame.     
  
  
• A DFAX change at this time will take years to physically implement on the MISO system and will not address the major contributing factors to congestion today, a fact that militates against the appropriateness of this proposed solution. Furthermore, two initiatives to target congestion over the long term were initiated over a year ago, and already advanced in the MISO stakeholder process 

• Generators are already abiding by Transmission Owners’ more stringent Local Planning Criteria and addressing Network Upgrades beyond the nominal distribution factor cutoffs. This Local Planning Criteria was historically not applied equally in the MTEP process (efforts to do so were just implemented at the end of 2021 and the results of such effort have not yet been presented to stakeholders), yet no studies have been undertaken to understand if any observed congestion might be occurring as a result of the differential treatment.  

• The IMM report referenced by Xcel to demonstrate wind curtailment, notes that the majority of the economic harm from curtailment was during spring and winter periods when the system load is typically lower (slides 19-20), and the system overall isn’t binding. Without actual economic analysis of this curtailment, it cannot be known whether a lower DFAX threshold causing generators to pay more Network Upgrades would even address the issue, or whether adding more progressive solutions such as batteries to the system might better support MISO’s overall resource adequacy and system reliability goals by capturing overproduction for later use, making the DFAX proposed solution significantly inferior in terms of effectiveness.  Without a full analysis and consideration of the data, goals and objectives prior to solution selection, the haphazard application of any solution, such as is proposed here, will not serve, and will likely adversely impact, the entire MISO footprint. A more holistic and comparative evaluation of all potential causes and solutions to address real-time congestion and assess the effectiveness of short and long-term solutions already underway, is warranted. 

The Xcel data provided was incomplete and potentially misleading.  It did not cover the entire MISO footprint, and, further, appeared to have depended on adding non-existent hypothetical generation to a 2016 DPP study model to produce results that would not have necessarily occurred. A more rigorous evaluation of congestion across the entire MISO footprint to better identify the issue to be addressed and an independent, rigorous, transparent study with study models/results available for review by generator interconnection customers (as generators will be highly impacted by this proposal across the entire MISO footprint) are necessary to properly evaluate this proposal. If MISO continues to pursue this proposal, it must complete its own evaluation and analysis and share with stakeholders, including the models used. 

Additionally, it is notable that MISO has not had a Market Congestion Planning Study (MCPS) for several years.  Such studies have previously been relied upon to identify the source of and potential resolutions for congestion on the MISO system.  The conduct of a such a study could facilitate the better definition of the issue Xcel seeks to solve as well as potential remedies.  Such studies are important as they identify and quantify contributors to congestion, such as the delayed construction/COD of the Cardinal Hickory Creek line. Without a full MISO footprint evaluation to define the issue system-wide, or identifying other more likely contributions to congestion, or addressing the real time issues identified by the IMM, this proposal cannot be justified as an appropriate solution. MISO must resume MCPS studies and maintain them on regular intervals prior to any consideration of lowering the ERIS DFAX. It is also worth noting that MISO has yet to develop a process by which interconnection Network Upgrades can be evaluated to determine if they meet MISO’s Market Efficiency Project (MEP) criteria.  MISO’s tariff indicates that if generator interconnection network upgrades qualify as MEPs the costs will be allocated as MEPs.  However, a process to do so does not exist. The need for one will become even more urgent if generators are required to mitigate congestion, in addition to reliability constraints.  

Finally, the positive impact of LRTP backbone transmission in addressing congestion has not been investigated. The LRTP lines coming in service will definitely have an impact on congestion, and is one of the reasons why MISO opted to not perform any MCPS studies until after the LRTP process was complete. If generators are assigned billions of dollars in additional Network Upgrades (as will occur with this proposal), the benefit-to-cost ratios of the Tranche 1 LRTP lines (and future Tranches) would be diminished. This proposal could ultimately result in undermining the entire LTRP processby cancelling previously approved individual LRTP lines in future years, prior to their construction, similar to what occurred with the proposed Xcel MEP line (Helena to Scott County) a few years back whose B/C ratio was lowered beneath the threshold to progress, based solely on generator interconnection Network Upgrades at the 20% DFAX level. We will be seeing many more instances of reduced B/C ratios of previously approved MTEP transmission lines with a potential DFAX change -- a clear shifting of costs. The LRTP process has been lauded by members, stakeholders, and regulators, for its progressive, balanced process and results but it will become “at-risk” if the Xcel proposal on lowering the ERIS DFAX were to progress. 

II. Existing initiatives in the MISO stakeholder process will address congestion into the future more effectively, and are farther advanced.  

There are currently two initiatives underway in the MISO stakeholder process that will specifically target congested areas, a regional TMEP process and adjusting storage dispatch in the shoulder planning case to more accurately represent how it operates. The proposal to lower ERIS DFAX thresholds would basically take a sledgehammer approach and significantly negatively impact many stakeholders across the MISO footprint by assigning higher Network Upgrades, but will notnecessarily address the real-time congestion about which stakeholders and the IMM have expressed concern and the IMM has offered clear solutions to, nor does it take into consideration the two efforts already underway since 2021 that will address longer-term congestion. 

 Regional TMEP-Like Process: 

Congestion is a real-time coordination and market issue primarily. Therefore, real-time coordination and market solutions should be the first and most effective courses of action taken.    Such closer to real-time solutions are what has been recommended by the IMM and what should be evaluated in the first instance relative to real-time congestion.  The next most effective targeted solution is an initiative currently underway in the MISO stakeholder process to create a regional TMEP-like process within the MISO system, similar to the highly effective MISO-PJM TMEP process. MISO is currently running a PROMOD study for this proposed policy change to determine whether and how it will address congestion, and should be complete in the next few months. A regional TMEP-like process would specifically analyze and target only congested areas, and therefore be much more cost-efficient and effective than a DFAX threshold change as proposed by Xcel which casts a wide net and will have significant unintended consequences, create further and unnecessary barriers to generation interconnection, ultimately negatively impacting Resource Adequacy, and unnecessarily raise rates for end consumers. At a minimum, the proposed Xcel Energy solution should be evaluated comparably to other congestion studies, e.g., via a PROMOD or other system-wide economic studies.  Indeed, regardless of the proposed solution to address economic congestion, prior to being sought for policy implementation system-wide, should have an appropriate, independent economic study to determine if such solution might be needed or effective.

Implementing Accurate Battery Storage Dispatch in Planning Studies: 

Battery storage is a unique element on the grid in that it encompasses both generation and transmission qualities. While not being a true generator, it depends on other generation to charge or withdraw power so it can deliver at a later time. Battery storage has a place in the financial market through energy arbitrage -buying low (when there is congestion, to relieve it) and selling high (when the demand is high, and congestion is low). But it has been prevented from serving this function because the MISO planning process has assigned unrealistic dispatch scenarios causing it to be assigned costly and unnecessary Network Upgrades that negate the very purpose of the battery storage to provide a market solution (energy arbitrage) by addressing congestion. MISO is nearing finalization of an initiative (implementation in 2022 DPP cycles) that along with the “Regional TMEP process” initiative, also began back in 2021 and will address congestion well into the future, past LRTP implementation. Battery storage has long been kept off the MISO grid through unrealistic dispatch scenarios, creating significant barriers, when it could be serving as a long-term market solution.  MISO’s delays in implementing Order 841 have compounded these barriers even further. With both of these incredibly potent barriers lifted beginning in the upcoming 2022 DPP cycle, battery storage solutions are expected to proliferate and are already demonstrated to be effective in reducing congestion. Battery storage is a market-based, long-term, game-changing, solution to congestion that is only now being “welcomed” onto the MISO system. Studies can demonstrate that this is a far more targeted and effective long-term solution to congestion than lowering the DFAX, which will have significant unintended consequences and be inefficient in solving the actual problem.  

III. The Xcel proposal is a significant deviation from long-standing precedent and principles upon which a competitive market is premised. 

 MISO’s ERIS service is an “as-available” service intended to be coupled with transmission service products for deliverability or optimized through market dispatch. As the deliverability of the injection is further evaluated, any potential, additional impacts or constraints would be identified in these complementary studies. Additionally, market solutions and dispatch are intended to deliver power and serve load reliably and at an optimized cost. Studies and models are run three days out, one day out, morning of, and in real time to continue optimization as system conditions change and become apparent. It is not clear from market results that congestion is attributable specifically to ERIS generator interconnection requests or unmitigated impacts associated therewith nor has MISO or the IMM identified this threshold or generator interconnection-related criteria as problematic to transmission congestion in the State of the Market 2021 report.

Additionally, it is critical to understand the goals and limitations of the MISO planning process, i.e., it is not designed to eliminate congestion in the Day Ahead and Real Time Markets. The MISO planning process is about getting a reasonable amount of transmission buildout reliably, without upgrading constraints for every possible contingency scenario. It is not an objective or obligation of planning-horizon processes, such as generator interconnection or MISO’s MTEP process, to identify and mitigate all potential congestion that could occur at any time and for any time period/duration in Day Ahead or Real Time nor would such a criteria/threshold be reasonable.  This is another clear concern with Xcel’s data presented as supporting its solution.  There are 8760 hours in year.  Xcel’s proposed solution seeks to remedy congestion experienced on lines for as little as 11 hours annually, less than 0.125% of the time. Indeed, a cursory look at the data presented by Xcel indicates that, for 9 out of the 11 constraints evaluated, congestion occurs in a very limited number of hours per year, representing 0.125% to 5.9% of the hours in a year.

MISO (along with SPP) already has the most stringent requirement of all ISO/RTOs to mitigate constraints for ERIS/”as available” generation interconnection service. This proposed change would make MISO the most restrictive ISO/RTO relative to interconnection requirements, creating an impact to generators in billions of dollars, while also negatively impacting and undermining MISO’s resource adequacy goals and the functioning of the MISO market. Although it may on the surface appear to be a simple number change, it has far-reaching impacts and implications to the market.   

Finally, it must be noted that any change to generator interconnection processes and practices that move beyond reliable interconnection is a significant policy change, and thus outside the existing tariff provisions, and requires a Section 205 filing. The Commission has made clear previously that “[p]ractices that significantly affect rates and services are required to be in the OATT, and determinations as to whether a practice significantly affects rates and services are made under a ‘rule of reason.” (137 FERC ¶ 61,199) “…Business Practice Manuals exist to provide additional implementation details and transparency about the…ISO's operations to market participants.”  (Paragraph 84 of 122 FERC ¶ 61, 271) They do not exist to provide a vehicle of convenience for public utilities to add new and different requirements, expectations, and charges to customers through truncated processes and without the opportunity for such change to be adjudged “just and reasonable.” 

A Section 205 filing is required for “all rates and charges for any transmission or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services.” (16 U.S.C. 824d(c).  Modifying the current generator interconnection process to require interconnection customers to remedy real-time congestion through network upgrades would be a new policy and practice that affects the rates and charges under MISO’s Tariff as well as all future generator interconnection agreements.  For these reasons, the implementation of this proposal through a BPM change a significant deviation from long-standing precedent and principles.

Conclusion

It has not been demonstrated that generator DFAX is the cause of congestion, nor is there any near term fix that generators can provide to address the congestion experienced today. The interconnection process is takes 3+ years to finalize, plus additional time to construct Network Upgrades. 

The credible causes and solutions to congestion identified by the MISO IMM primarily relate to real time operations, are fully under the control of MISO transmission owners --they do not relate to generator interconnection studies, which have historically been conducted to address reliability, and not congestion. 

There are also several initiatives already advanced in the MISO stakeholder process to address congestion (a regional TMEP-like process and removing unnecessary barriers for battery storage to interconnect.)  These solutions need to be looked at as a first step, along with the IMM’s recommendations, before generator DFAX changes, with many negative unintended consequences are considered. 

In addition to the previously mentioned solutions, another cost effective, quickly deployable means to address congestion would be for MISO to consider adopting policies that facilitate Grid Enhancing Technologies, such as dynamic line ratings and advanced powerflow controls. These solutions are generally much lower cost and higher impact than broadly and unnecessarily assigning additional Network Upgrades to generators across the MISO footprint, including areas where congestion is not an issue, and raising the overall cost of energy in the process. 

Finally, due to the impact the Xcel proposal would have on the MISO Market and some of the key principles the market is founded upon, we strongly believe any ERIS DFAX policy change effort must be undertaken in the context of a Tariff filing, and not simply a BPM change. 

We appreciate MISO’s consideration of these points and look forward to further discussions. 

Sincerely,

Rhonda Peters, Ph.D.

Technical Consultant for Clean Grid Alliance

ENGIE NA Comments on ERIS DFAX Reduction Proposal

September 8, 2022

ENGIE North America, Inc. (“ENGIE) appreciates the opportunity to submit these comments in response to the Xcel Energy ERIS Distribution Factor (DFAX) reduction proposal. Unfortunately, ENGIE’s continues to oppose reducing the DFAX threshold for the same reasons stated in prior comments.  

We encourage MISO to conduct a transparent and inclusive stakeholder process prior to arriving at a recommendation to change the ERIS DFAX. So far, it appears that only one stakeholder’s input has been considered as no new substantive information has been added to the discussion. If reducing the ERIS DFAX is ultimately needed, generation interconnection customers need more information and data to support the decision than we currently have.

Please see ENGIE’s comments submitted on August 8, 2022 below. We look forward to further discussion.

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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,

Margaret Miller

Margaret Miller, Director, Government and Regulatory Affairs

1360 Post Oak Blvd. Houston, TX 77056

(916) 342-6311 

margaret.miller@engie.com

Pine Gate Renewables (PGR) appreciates the opportunity to provide comments on the Energy Resource Interconnection Service (ERIS) distribution factor (DFAX) reduction proposal.  PGR remains concerned that the data and analysis provided does not support the proposed reduction in the ERIS threshold and is now concerned that the proposed implementation of the this change in the 2022 Definitive Planning Phase (DPP) cycle is premature.

As or even more important than the lack of supporting data and analysis for this proposal, are the potential issues with the proposed implementation.  In its August 15, 2022 presentation, on which this feedback was requested, MISO indicated a schedule that would see implementation of this proposal in 2023.  In its presentation from August 30, 2022, MISO indicated that this proposal will be implemented for the 2022 DPP cycle.  This implementation timeline is problematic for following reasons:

1. Interconnection customers have already made business decisions, e.g., site selection and control, point of interconnection, and offtake strategy, in reliance on the current Business Practice Manuals (BPMs) (that are still in effect).  Importantly, the glidepath for these decisions was in anticipation of the September 15, 2022 deadline for interconnection request submittal for the 2022 DPP cycle.  Activities and decision-making in preparation for a compliant interconnection request for the 2022 DPP cycle - especially as needed to meet MISO’s site control requirements - have been occurring for several months (if not years) in reliance on MISO’s existing BPMs.  No revisions to the BPMs have yet been posted for review to reflect this change and it is likely that the BPM language posting and change would take effect too close to (or even after) the 2022 DPP request submission deadline for interconnection customers to evaluate the impact of the change on their resource expenditures, financial analyses, and business decisions. Such an implementation timeline is inequitable and likely to adversely affect the 2022 DPP cycle and later cycles as interconnection customers did not have sufficient notice to incorporate the proposed DFAX change into their analyses, increasing the potential for late-stage withdrawals and unnecessarily harming 2022 DPP interconnection customers by retroactively applying more stringent criteria without adequate notice.
   1. The Commission has held previously that “it is unfair to market participants to assume that interpretations made by the Midwest ISO “in its own publications…cannot be regarded as coming from a credible source.”[1]  The same is true here.  Interconnection customers have made financial decisions and commitments in preparation for their submission of interconnection requests into the 2022 DPP Cycle and have done so in reliance on the currently effective BPMs and MISO’s assertions on August 15, 2022 that any changes to the DFAX threshold for ERIS would not be undertaken in 2022.  MISO has now, as set forth in its August 30, 2022 presentation at p. 7, reversed course with the 2022 DPP submission window closing in 2 weeks.  Several interconnection customers have already submitted their requests or are in the process of doing so having based such decision on the current MISO published documentation.  For this reason, PGR respectfully requests that MISO suspend its decision to incorporate this change into the 2022 DPP cycle.
   2. It is unclear, at this time, what process is being utilized to provide notice of this change that will impact applications that are currently being submitted for the 2022 DPP cycle.  MISO has indicated that this change will, ultimately, be reflected in its BPMs. The current BPM change process[2] points to the governance guide, but the governance guide does not indicate the notice mechanism for changes nor the formal communication of the effective date of proposed changes.  Moreover, the link that is intended to provide notice of pending changes and that is included in the process is broken.  Thus, it is unclear how stakeholders access pending changes, such as this one, under the posted process and what should be considered as the formal notice and proposed effective date.  The feedback requests posted to date have not included redlines of the proposed BPM changes.  For these reasons, PGR is concerned that stakeholders have not received reasonable notice of this change to support its implementation in the 2022 DPP cycle.
   3. PGR and several other commenters have raised concerns regarding the potential that prospective generators would be responsible to address additive loading from existing generators that is currently above 10% despite not causing the entirety of the overload.  Any change to the DFAX threshold that would tag the 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.  Any implementation of a lower DFAX threshold must address this issue such that prospective generators are held responsible solely for their contribution to loading – not for pre-existing system conditions.

1. PGR and other commenters have raised concerns that lowering the DFAX threshold to address real-time congestion is a change to the overall tariff provisions governing the interconnection of generators.  Importantly, Attachment X is solely focused on the reliability impact that the interconnection of generators will have – not the economic impact that the interconnection of generators will have.  While PGR agrees that technical, implementation details appropriately reside in BPMs, the lowering of the DFAX threshold to address real-time economic congestion is a change to the conditions under which generation interconnection within the MISO footprint is evaluated and performed.  Indeed, it is a fundamental change to the framework for generator interconnection that significantly affects the rates, terms, and conditions of generator interconnection service under the MISO Open Access Transmission Tariff (OATT).  Accordingly, while PGR does not oppose the percentage and any change thereto occurring in the BPMs, it respectfully asserts that, pursuant to the “Rule of Reason,” Attachment X must be updated to incorporate the new requirement that generators interconnecting to the MISO system must not only address reliability requirements, but must also address economic congestion as a condition of interconnection.
   1. Likely sections requiring revision include the Definitions Section (Adverse System Impact, Injection Rights, Interconnection System Impact Study, Provisional Interconnection Study, Replacement Impact Study, etc.), Section 3.2, Section 3.5, Section 3.7, Section 7.1, Section 7.3, Sections 14.1 – 14.1, and Section 16.1.

In addition to these process concerns, PGR reiterates its previous comments relative to the dearth of data and analyses supporting the proposed change.  The presentations provided to date have not offered a level of detail, technical information, or analysis that supports or would be necessary to support addressing economic congestion in the generator interconnection process across the entirety of the MISO footprint.  In particular, the data offered has not provided reasonable assurance that unmitigated thermal violations in ERIS studies create real-time congestion in the system nor that the reduction from a 20% threshold to a 10% threshold would address the issue, especially given all the other factors that contribute to real-time congestion.

As has been discussed during the stakeholder meetings, generator interconnection was not cited as a cause of congestion in the 2021 State of the Market Report nor was the reduction in the DFAX threshold a recommendation to address congestion.  Indeed, PGR is concerned that, despite the Independent Market Monitor (IMM) having identified very specific steps that MISO and the Transmission Owners could take to reduce real-time congestion more directly, those recommendations, which have been indicated as having high and/or near-term benefits for the reduction of congestion on the MISO system, are not being actively pursued. Whereas this proposal, which has a longer-term implementation timeframe, and a much more tenuous connection to and lower likelihood/potential to positively impact real-time congestion, is being pursued despite a dearth of data and analysis demonstrating its appropriateness and effectiveness for its intended purpose.

Despite numerous requests, stakeholders have not yet been provided with access to the data or analysis used to establish the new DFAX threshold.  This should be contrasted with the effort currently underway in the Southwest Power Pool (SPP), where staff and stakeholders are scoping a thorough study to ensure that any proposed changes will achieve their intended purpose relative to congestion.  For this reason, PGR re-iterates its recommendation that that an effort should be initiated to conduct (and share with stakeholders) an appropriate amount of study such that the association between real-time congestions and the ERIS DFAX threshold is substantiated and the appropriate percentage for the threshold is elucidated and supported.

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

The Energy Resource Interconnection Service (ERIS) Distribution Factor (DFAX) reduction proposal is much more than a BPM level adjustment. It is a significant policy change that has long lasting impact.

We strongly encourage MISO to have more robust stakeholder discussions about the issue in the policy forums than rushing into implementing it in the MISO generation interconnection process.    

As stated in our previously submitted comments, while we are sympathetic with the market congestion issues Xcel raised, we believes this historical congestion issue 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.

• Last but not least, MISO proposed to implement the new reduced DFAX cutoff in the whole MISO footprint at the same time as the LRTP Tranche 1 projects are implemented in the DPP model. LRTP Tranche 1 projects are only focused on MISO North and Central; implementing the 10% DFAX threshold in absence of LRTP will render MISO south generation interconnection projects unfairly carry additional multiple millions of dollar network upgrades that are not needed for maintaining system reliability.

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

Neither XCEL nor MISO have provided details and evidence of the driving issue(s) that we are trying to solve. Without fully understanding the problem, stakeholders cannot adequately opine on whether the proposed solution has merit. Changes to the MISO process must be rooted in fact, supported by data, and cannot be driven by unsubstantiated information.

We, again, are requesting these issue details from XCEL and MISO and look forward to reviewing that critical information before any solution is considered.

AES Clean Energy Comments to the IPWG on the Proposal to Lower the Generator ERIS DFAX

September 8, 2022

AES Clean Energy appreciates the opportunity to offer additional comments on the ERIS DFAX Reduction Proposal. However, AES Clean Energy is disappointed that MISO advanced this issue without engaging and responding to stakeholder comments that were filed on August 8th. AES Clean Energy reiterates its previously submitted comments, and requests that MISO re-evaluate the schedule for this initiative and provide additional time for stakeholders to consider the broader impacts lowering the ERIS Dfax level would have and to determine if this is the best solution to address the congestion issues originally raised by Xcel. MISO should not bring a finalized recommendation to the PAC in November and should extend the schedule to at least Q2 2023 to provide stakeholders the necessary time to evaluate and engage on this issue. AES Clean Energy also reiterates its prior comments that this issue should not be a simple BPM change but should be filed as a tariff change at FERC since it would have a material impact on the “rates” i.e., network upgrade costs paid by generators for ERIS service. 

AES Clean Energy submits the following questions on MISO’s preliminary analysis presented on August 15th:  

• Could MISO provide additional details on the identified network upgrades in their analysis and if there are overlap/correlation with other causes/justifications, i.e., are there overlap with any projects identified in past MTEP studies and their causes- reliability, economic, policy, etc.? 

• If there are correlations with past MTEP projects, how would the costs have been allocated through the schedule rates? 

• How do the identified network upgrades in the study correlate to existing congestion patterns? 

• What does 10% Dfax really mean for the constraints identified in the study? 

• The IMM report cited by Xcel shows that Wind resources are a primary cause of system congestion, being curtailed 10% of the time. Did Xcel or MISO find that most of the congestion related violations occurred during Shoulder Peak when wind resources are statistically online? 

• Additionally, if wind resources are the primary source of congestion in MISO, wouldn't it be more cost effective to incentivize BESS to capture the curtailed wind as opposed to building or reconductoring lines to carry flow during summer peak conditions?

• Shouldn't MISO wait until early results for DPP-2022 Phase 1 are in to see if ERIS and NRIS network upgrades are significantly reduced due to LRTP using the 20% DFAX, as assumed? If there are studies internal to MISO that show this, stakeholders should be informed. 

Sincerely,

Bridget Sparks, PhD

Interconnection Policy Manager for AES Clean Energy

As previously communicated in our feedback on this issue (included below for reference), WEC Energy Group continues to support the evaluation and adjustment of the DFAX threshold for ERIS studies.

August 8, 2022 Feedback:

WEC Energy Group believes that reducing the ERIS DFAX cutoff from 20% to 10% is an integral component of a larger group of GIP improvements, such as DPP dispatch assumptions, affected system studies (JTIQ), and integration of LRTP Tranche 1 into the DPP models.  We support the concurrent application of a lower DFAX cutoff and the inclusion of LRTP Tranche 1 within the generation interconnection process. 

The existing DFAX threshold was established in the early 2000s and reflects pre-energy market mindset of obtaining ERIS for interconnection and NRIS to secure firm transmission between the resource and the network load claiming that resource through Module B of the MISO tariff.  At the time, the intent was that each resource would obtain both ERIS and NRIS in order to interconnect and secure firm NITS between the resource and its associated load.  This concept supported the use of a higher DFAX threshold for ERIS because the assumption was that the NRIS study would identify the relevant network constraints and upgrades.  ERIS would provide only an interconnection without any ability to secure NITS; an ERIS resource could obtain firm point-to-point transmission service but would be required to submit a transmission service request (TSR), subject to a TSR study and if approved, pay a separate fee for such service (NITS on the other hand is billed to NITS load based on coincident peak load – NITS is automatically approved if the resource has NRIS).  A resource without NITS (or firm transmission service) was curtailed before a NITS resource through transmission line loading relief procedures (TLR), maintaining a distinction between ERIS and NRIS.

The mature energy market environment of today is much different than it was in the early 2000s.  Today, a resource with only ERIS has the right to participate in the energy and ancillary services markets on the same basis as a neighboring resource that has both ERIS and NRIS.  This can result equity issues (both reliability and economic) when the NRIS resource has paid for network upgrades but whose dispatch and dispatch price are negatively affected by a neighboring ERIS resource because the energy market algorithms make no differentiation between ERIS and NRIS.  A lower ERIS DFAX cutoff will help to shrink, but fully not eliminate, this inequity within the market.

Apex Clean Energy (Apex) appreciates the opportunity to provide additional comments on the ERIS Dfax Reduction Proposal (the “Dfax Proposal”) currently being discussed at the Interconnection Process Working Group (IPWG).  Our original comments of August 8^th remain valid concerns and we look forward to hearing MISO’s response to those comments.  Apex cannot and does not support the current Dfax Proposal.  While we appreciate the interest in reducing congestion, the Dfax Proposal has not been shown to be the right approach or solution to the issue.  Please see the attached document for our further comments on this issue.

The 10% ERIS DFAX value may be the right compromise compared to today’s 20%, but MidAmerican believes providing additional details of the analysis and results gives stakeholders a fuller picture of the potential impacts of the change.  In addition to the number of increased violations to mitigate, providing the type of mitigation required would help understand the impact of the different ERIS DFAX thresholds. For example, with a 20% DFAX threshold, a few structure replacements might be identified for a particular transmission facility, but with 10% DFAX threshold a full rebuild & reconductor might be required. The specific output data could be provided to those that have CEII clearance.

The 10% ERIS DFAX value may be the right compromise compared to today’s 20%, but MidAmerican believes providing additional details of the analysis and results gives stakeholders a fuller picture of the potential impacts of the change.  In addition to the number of increased violations to mitigate, providing the type of mitigation required would help understand the impact of the different ERIS DFAX thresholds. For example, with a 20% DFAX threshold, a few structure replacements might be identified for a particular transmission facility, but with 10% DFAX threshold a full rebuild & reconductor might be required. The specific output data could be provided to those that have CEII clearance. 

Additionally, the change in ERIS DFAX could increase the frequency of piecemeal upgrades, where MEP-style or LRTP-style transmission may provide a better overall solution.

WPPI Energy reiterates its comments from the previous month’s feedback request (https://www.misoenergy.org/stakeholder-engagement/stakeholder-feedback/ipwg-eris-dfax-overview-and-xcel-reduction-proposal-pac-2022-3-20220720/).  In particular, we continue to support Xcel’s proposal as, based on the information available to us now, we expect that the proposed change will better assign remediation responsibility for impacts caused by new generator interconnections.  We understand concerns of other stakeholders, however, and support provision of more detailed analysis of the impacts of the change in interconnection-study methodology and the impacts of new generation on off-peak (ERIS scenario) system loading.  At a minimum, we would request that MISO post full details on the analysis presented at the August IPWG meeting.

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 August 15, 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 August 15^th meeting of the IPWG, MISO presented their position on the Distribution Factor (DFAX) reduction proposal that had been previously presented by Xcel Energy. MISO had not reviewed prior requested feedback from stakeholders on this topic, which was disappointing as a stakeholder. AEMA offers the following feedback on MISO’s opinion of the proposal and the preliminary MISO analysis:

• In the presentation from the IPWG, MISO states that it “believes that lowering the DFAX threshold could bring positive benefits to stakeholders.” While it may be the case that changes to the DFAX threshold could benefit some stakeholders, it is certainly not true that these changes will benefit all stakeholders. For example, the changes under consideration could potentially harm those entities seeking to add additional generation to the system. AEMA encourages MISO to invest more time understanding the overall impact to project development, renewable resource integration, and the root causes of the reliability and congestion issues that MISO is seeking to address. The analysis, as presented by MISO, appears to only examine one specific aspect of the change, the identification of new network upgrades that would have happened. There does not appear to be any attempt to understand the impact on the proposed projects, the changes in economics, or the sensitivity of the percentage change. The concept is not fully vetted for the impacts on project developers and future interconnection customers. 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 initiatives to help with congestion relief.[3] 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. Has MISO examined how these could be utilized to avoid making changes to the DFAX threshold?
  
  
• AEMA would encourage MISO to also 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.[4] 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.[5]^,[6]
  
  
• Given the multitude of options for addressing transmission congestion, potentially with much lower costs of implementation, 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. 

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

Southern Renewable Energy Association (SREA) Comments 

Re: ERIS DFAX Reduction Proposal (PAC-2022-3) 

Regarding MISO’s recent presentation on the ERIS DFAX Reduction Proposal at the 8/16/2022 IPWG Meeting, SREA would like to submit the following comments. 

Overall we propose that, if applied in MISO, any reduction in DFAX related to ERIS interconnection triggered upgrades should only be applied to subregions where LRTP lines have been approved by state regulators. If this is a reliability driven change related to interconnection upgrades, it should be considered in relation to the regional reliability driven LRTP process. For that reason, MISO should not apply the DFAX reduction proposed to ERIS interconnection requests in MISO South. Not until LRTP Tranche 3 is approved by state regulators for the subregion. 

Additionally, it’s important to weigh the benefits of lowering the DFAX against other solutions like LRTP that could mitigate the reliability issues cited by MISO. Congestion relief is cited as a subset of the reliability benefits brought about with the DFAX reduction proposal, but without a dedicated congestion study that could identify transmission fixes outside of the GI process, it’s hard to weigh the unique benefits of lowering the DFAX threshold. This extends also to the much larger regional LRTP process, that while much larger in scope, provides congestion relief benefits in addition to a host of reliability benefits that could alleviate the concerns driving the DFAX reduction proposal. While it’s one thing to propose the DFAX reduction for IC’s in the North subregion that has already had LRTP planning sharing costs to load, it’s entirely different to make the argument that it would be warranted in MISO South, where no LRTP lines have been neither proposed, nor approved. 

Submitted on behalf of the Southern Renewable Energy Association, 

Andy Kowalczyk

SunEnergy1 appreciates the opportunity to provide feedback on ERIS DFAX cutoff change proposal. SunEnergy1 does not support the change proposal. Details follow:

1. Please refer to SunEnergy1’s feedback to the July 20^th IPWG/PSC joint meeting on the same topic. The main reasons for SunEnergy1 not supporting the proposal were listed there and are still valid. In addition, SunEnergy1 provides the following three comments related to the discussions from the 8/15 IPWG meeting.
2. Based on MISO’s quote of OMS’s transmission cost allocation principle, beneficiaries is a main consideration factor. Given that the basic reason of the proposal is to prevent/alleviate future market congestions where the main beneficiary is MISO market load, it is unjust and unreasonable to allocate 100% cost of these transmission projects to new generation entries.
3. SunEnergy1 wants to draw MISO’s attention to the reference of PJM’s ERIS 10% DFAX cutoff in the meeting. It was misused. For regular N-1 contingencies and system-intact cases, ERIS is not responsible for fixing the overloads from the study because the market can redispatch to solve the overload, including turning off the study generator. In other words, PJM’s regular ERIS dfax cutoff is 101% rather than 10%.
4. In the event that MISO decides to implement the change after stakeholder discussions, MISO should make a tariff filing to materialize it in the tariff to achieve greater transparency and consistency.