WEC Energy Group recommends that MISO and stakeholders strive to maintain consistency in the cost allocation of TMEPs between SPP and PJM. That isn't to say that the MISO-PJM TMEP cost allocation should maintain the status quo. The TMEP cost allocation with PJM was established several years ago and may require enhancements as MISO, SPP and stakeholders design the MISO-SPP TMEP cost allocation methodology.
Great River Energy supports increased use of TMEPs as it is a quicker and more efficient way to reduce congestion in areas with persistent congestion versus using a typical Market Efficiency Project.
We also generally agree with using the same regional cost allocation method for TMEPs on the SPP seam as is used on the PJM seam, but request that MISO and stakeholders consider extending the requirement that projects must be in-service by the 3rd summer peak to a timeframe that more realistically matches project development timeframes. Given the present supply chain issues as well as impending LRTP project permitting and construction backlogs, we think that extending this in-service requirement to a 4th summer peak after approval will allow more beneficial projects to meet the qualifications.
LS Power Development (LS Power), on behalf of its MISO transmission developer members, appreciates the opportunity to provide brief comments on the proposed approach for MISO/SPP Targeted Market Efficiency Project (TMEP) Cost Allocation.
For process consistency, MISO and SPP propose to apply the existing PJM/MISO TMEP cost allocation method, including identical TMEP criteria, on the MISO/SPP seam. LS Power agrees with this approach. Since TMEPs are intended to fulfill a particular purpose on both seams, the precedent established by FERC’s approval of the PJM/MISO TMEP criteria supports use of the same approach for the MISO/SPP seam. There do not appear to factors unique to the MISO/SPP seam that would dictate the use of different TMEP criteria. To the extent that changed circumstances warrant reconsideration of these criteria [for example, an increased maximum project cost due to inflation], the PJM/MISO criteria would also be ripe for reconsideration.
LS Power also observes that TMEP studies are not intended to supplant forward-looking transmission planning by MISO and SPP. TMEPs do not serve the same purpose as projects identified in the Coordinated System Plan (CSP) studies or initiatives such as the Joint Targeted Interconnection Study. Therefore, the “quick hit” nature of MISO/SPP TMEPs should be preserved; specifically, they should be upgrade projects with a short implementation period, as MISO and SPP have proposed. We recognize and share the concern that forward-looking MISO/SPP planning processes have not yet resulted in approved interregional projects. However, rather than calling on TMEP studies and projects to fill this gap, we support MISO’s and SPP’s continued focus on CSP process improvements, as well as creative approaches like the JTIQ Study.
WPPI Energy is comfortable retaining the TMEP-process parameters in place on the MISO-PJM seam, though our preference would be to eliminate the project-cost maximum. We expect relatively few M2M congestion issues could justify costs above the $20M threshold, but if such issues can be mitigated in the near term, we would not want mitigation projects that appear economic under the TMEP tests to be ineligible for approval under the TMEP process because of projected cost above an arbitrary threshold.
Please post only this slightly updated version of our comments.
The Environmental Sector and the American Clean Power Association strongly support MISO and SPP’s effort to develop a Targeted Market Efficiency Project (TMEP) type for small, low-cost projects that can address historic congestion along the seam. We generally support moving forward with using the same regional cost allocation method for TMEPs with SPP as MISO currently uses with PJM in order to bring this project type into the tariff expeditiously. However, we believe there are ways to improve the TMEP project type along both the SPP and PJM seams, such as modestly increasing the maximum cost threshold and/or the four-year payback period. We urge MISO and SPP to consider these changes at this time, particularly if it appears that there will not be any projects that qualify in the initial TMEP study employing the currently proposed criteria.
During the October 18th RECB meeting, MISO stated that the proposed $20 million maximum cost for TMEPs is intended to align with the $20 million minimum cost threshold used for other project types. We note that the minimum cost for MEPs is $5 million, so this point does not hold. Given inflation increases, especially in recent years, the Environmental Sector urges MISO to increase the proposed $20 million cost cap for TMEPs along the SPP seam and to consider a similar change along the PJM seam. Inflation since the first set of TMEPs was approved in 2017 would suggest that $20 million in 2017 dollars has a value of over $24 million in 2022 dollars. For example, if the cost of a transformer was considered to be the most costly potential TMEP project, the cost cap should at a minimum keep up with inflation and cost increases in transmission equipment. Furthermore, considering the expected increase in demand for transmission equipment in the coming decade, it is likely that supply will be slow to keep up, thereby pushing the price of such equipment even higher. Additionally, it appears there is broad stakeholder support to raise this cost cap for inflationary reasons, as indicated by numerous stakeholder comments during the October 28 MISO-SPP IPSAC presentation. For MISO and PJM, such a change to the TMEP criteria could likely be made in an administrative filing, as it does not make any substantive changes to the TMEP project type, but would only be intended to adjust the cost thresholds relative to inflation.
We strongly urge MISO and SPP to hold off on finalizing the TMEP criteria until after they finish the first TMEP study and have an opportunity to reflect on lessons learned. Minor changes to the proposed criteria could result in approved projects that might otherwise be eliminated because they fail to meet the proposed criteria by a small margin. MISO and SPP should work to ensure that their efforts and those of stakeholders have not and will not continue to result in no approved interregional projects along the MISO-SPP seam.
Respectfully submitted,
Natalie McIntire
Consultant for Clean Grid Alliance
On behalf of the Environmental Sector
Entergy Operating Companies’ Feedback on MISO-SPP Targeted Market Efficiency Projects (TMEP) Cost Allocation
November 4, 2022
The Entergy Operating Companies[1] (Entergy) appreciate the opportunity to provide feedback on questions posed during the October 18, 2022 meeting of the Regional Expansion Criteria and Benefits Working Group (RECBWG), on the following questions related to MISO-SPP Targeted Market Efficiency Projects (TMEP) Cost Allocation:
As Entergy has commented in the past, we continue to have concerns with the basic premise of TMEPS, and do not agree that projects identified on the basis of backward-looking data can be presumed to relieve future market congestion. In particular, MISO has demonstrated the significance of the resource transition that is underway. Given the time involved to identify the historical congestion; approve the project; and design, permit, and construct the upgrade, the potential that the intended benefits might not be realized is even more significant than it may have been a few years ago.
Entergy also does not agree that the costs for those projects should be allocated strictly on the basis of the sum of all Day Ahead congestion contributions for each load and gen node in each Local Balancing Authority (LBA) for every hour of flowgate congestion during the 2-year study period. Further, Entergy has concerns that TMEPs will result in smaller, piecemeal planning “solutions” that impede more robust and holistic solutions identified through reasonable, future-looking transmission planning.
For the reasons below, Entergy agrees with how MISO, at the PSC, has characterized the issues with applying the TMEP concept within MISO. But if MISO and SPP intend to go forward with the establishment of this project type, we support allocating such projects in the same manner as TMEPs with PJM, provided that there is an opportunity for stakeholder input regarding MISO’s determination of the distribution of regional benefits, and provided, further, that M2M flowgate data should not be included in the evaluation of potentially avoided congestion where a review of the data indicates that M2M payments resulted from an event, rather than persistent congestion.
Additionally, Entergy continues to advocate for the inclusion of a no harm test and an economic analysis of the proposed solution by each RTO individually, at a minimum.
[1] The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.