Walden Renewable Development (WRD) objects to MISO’s proposal to cap total MW available to an interconnection queue while also allowing a single developer to be allocated up to 10% of capped amount.   WRD argues for a smaller per developer cap, and most importantly WRD argues for an equitable system for filing new requests to ensure it is not monopolized and more developer/sponsors are able to submit new requests under the cap once the queue opens.  To achieve this Walden proposes limiting the number of projects any developer can submit per hour / per day.

MidAmerican Energy Company (MidAmerican), as a MISO Transmission Owner, offers the following feedback on MISO’s July 19, 2023, generator interconnection queue reform proposal.

MidAmerican agrees that implementing a cap on the MW of study generation in a DPP queue cycle is critical to a successful queue reform package.

MISO proposed setting the study generation MW cap at 60% of peak load based on the DPP 2021 study cycle. MidAmerican believes the DPP 2021 study cycle was also too large to study effectively and recommends the MW cap for a DPP study cycle be set at no more than 50% of the MISO load included in the MTEP Summer Peak model being used as the starting point for the DPP study models (e.g., MTEP23 2028 Summer Peak model for DPP 2023 study). This MW cap would be split between MISO North (Classic) and MISO South based on load ratio share between the two regions. MISO North (Classic) could be further split by subregion (West, Central, East ATC, East ITC) if preferred, but this may not be necessary if MISO continues to dispatch generation in MISO North (Classic) as a single pool as described in BPM-015 Section 6.1.1.1.1 Bench Case Development and Section 6.1.1.1.2 Study Case Development.

One item MISO needs to consider when determining an appropriate DPP study cycle MW cap is how much study generation can be dispatched using BPM-015 Table 6-1 fuel type dispatch without violating the minimum power values (Pmin) of thermal generation that is online in the bench case model and is ramped down to accommodate the study generation. This potential problem is illustrated in the draft DPP 2022 Phase 1 Summer Peak bench case model posted to the MISO Extranet on May 1, 2023, where the fuel type dispatch of the very large amount of higher queued generation from DPP 2021 and previous study cycles that is not in the base MTEP22 model used as the starting point for the DPP 2022 bench case model resulted in online thermal generation across MISO being reduced to outputs below Pmin. Assuming large numbers of thermal generators are online at low outputs they cannot actually maintain while providing reactive power support to the system can be a worse assumption than assuming existing and higher queued generation is turned off to accommodate the study generation. This could also cause problems when building transient stability models in Phase 2 if machines being outside their allowable power limits cause transient stability model initialization errors or the machine output starts changing during the no disturbance potion of a simulation before a fault is even applied.

MidAmerican also recommends that a DPP study cycle Phase 1 system impact study should not begin until the previous cycle has passed Decision Point 2. This will improve the accuracy of the Phase 1 study results by significantly reducing the amount of higher queued generation projects with undetermined and unmodeled network upgrades in the study models.

Enel North America Comments on MISO Queue Reform

August 9^th, 2023

Enel North America (Enel), part of the Enel Group, is a clean energy leader in North America and is working to electrify the economy and build a net-zero carbon future by decarbonizing energy supply, electrifying transportation, creating resilient grids, and promoting a just, equitable transition. Enel North America serves over 4,500 businesses, utilities, and cities through renewable power generation, demand response, distributed energy resources, smart e-mobility solutions and services, energy trading, advisory and consulting services, and more. Its portfolio includes over 9.7 GW of utility-scale renewable capacity, 606 MW / 910 MWh of utility-scale energy storage and 78 MW / 177 MWh of distributed energy storage capacity, 4.7 GW of demand response capacity, and 170,000 electric vehicle charging ports.

Enel appreciates the opportunity to comment on MISO’s queue reform proposal. We recognize there are lengthy queue delays, uncertain timelines and upgrade costs, and insufficient transmission capacity preventing the timely development of new generation projects. Failure to address these issues will harm consumers through decreased competition, will impede reliability due to fewer resources coming online, and will jeopardize America’s transition to a clean energy economy. We are hopeful that MISO will heed our below suggestions and continue to work collaboratively with all its stakeholders on holistic solutions that address the leading cause of delays in the interconnection process.

POI Site Control

MISO proposes Interconnection Customers (IC) should have 50% site control from the generator site to the Point of Interconnection (POI) upon application, 50% site control and 50% of the IC switchyard before Phase 2, and 100% site control before the Generator Interconnection Agreement (GIA) negotiations. A 100% site control requirement prior to GIA negotiations is too restrictive and offers very little flexibility. A 90% site control requirement, as opposed to 100%, is ideal. We want requirements to reflect developmental progress, but require some flexibility, especially as it relates to generating facility tie lines. We are supportive of MISO including language in its Tariff regarding the return of the generator tie deposit upon demonstration of site control.

We support requiring Transmission Owners (TOs) to sign-off on POI before study kick-off without penalties. We would like to see MISO maintain a record of TO signoffs and encourage verbiage that would require TOs to timely communicate changes to the POI.

Milestone Payments

MISO proposes increasing milestone payment M2 from $4,000 per MW to $12,000 per MW. $12,000/MW is simply too high and is a substantial increase from the current $4,000/MW that offers nothing to ICs in return for the increased cost and risk. We propose keeping the current $4,000/MW for M2. Additionally, we propose keeping 10% of Network Upgrades (NU) and 20% of NU with no change in $/MW, for M3 and M4, respectively. Further, the milestone increases are completely unnecessary should a MW Cap be implemented.

Automatic Withdrawal Penalties

If M2 stays at $12k/MW, then all automatic penalties must be removed. While there needs to be some risk as you advance in the queue, the increase in milestone payments and automatic withdrawal penalties is too costly. It is better to incentivize the project to withdraw in a timely fashion once the increased costs are identified than to have the project linger in the queue hoping that the results will become more favorable later.

Penalty Free Withdrawal (PFW)

Enel supports eliminating PFW between Phase 1 to Phase 3. A new PFW threshold that will apply between Phase 1 and Phase 2, and again between Phase 2 and Phase 3 has not been shared with stakeholders. We encourage MISO to share their proposed thresholds. Removal of Phase 1 to Phase 3 makes sense and we are supportive of this proposed change.

When these withdrawals do occur, the aim of a Tariff should be to protect other Interconnection Customers from harm, not to simply penalize the developer of the failed project. Generator interconnection project withdrawals are commonly due to high Network Upgrade costs and PFW is one provision that helps balance the increased risk to ICs. Appropriate penalty free withdrawal provisions should be implemented to encourage projects to withdraw in a timely way following significant increases in Network Upgrade costs. Further, we encourage MISO to consider POI related PFW if POI issues outside of the IC's control cause the IC to not meet POI site control milestones.

MW Cap

Enel is supportive of an overall MW Cap and a Parent/Entity Cap, if implemented appropriately. We implore MISO to provide an analysis with specific parameters as to how this would be implemented, monitored, and enforced. A MW Cap could help mitigate the risk of queue manipulation by reducing the risk of a select number of developers comprising most of the queue.

We are opposed to allowing projects with a PPA in the cycle if above the MW Cap. This would allow vertically integrated utilities to self-deal.

Stakeholder Process and Timeline

While we appreciate MISO soliciting stakeholder feedback, this process has been rushed given the magnitude of this proposal and its impact on interconnecting customers. We encourage MISO to consider moving its filing date with FERC to accommodate more collaboration with stakeholders and to ensure compliance with FERC Order 2023.

For the reasons set forth above, Enel requests that MISO take these comments into consideration.

Sincerely,

Gina Mace

Senior Manager, Regulatory Affairs and Policy

Enel North America

SB Energy appreciates the opportunity to provide comments on the MISO queue reform. Thank you for conducting a MISO queue reform workshop. Please see below the comments that SB Energy can offer:

1. M2 amount of $12,000/MW is extremely high. PJM and SPP uses $4,000/MW. MISO is using 3 times more than even though the Network Upgrade cost per project with GIA is not this high. MISO should consider a lower number than $12,000/MW. In general, SB Energy is supportive of increasing the milestones so that less speculative projects will enter the queue, but $12,000/MW appears to be extremely high and therefore, SB Energy does not agree with this number. However, MISO shall not introduce Automatic Penalty Withdrawal and increase in milestones at the same time because this is making the requirements extremely stringent from both fronts for IC’s. If milestones are increased, then Automatic Penalty Withdrawal shall not be considered. 
2. MISO has not included the comparison chart for M3 and M4 in PJM and SPP Tariff. Please note that PJM and SPP still uses similar calculation like current MISO’s approach. The idea for comparison with other RTOs was to make sure similar approaches are used in all regions similar to what MISO has noted about site control. MISO shall not vary the requirements drastically from PJM and SPP on M3 & M4. Moreover, it is important to remove M2 when calculating M3; and remove posted M2 and M3 when calculating M4. 
3. If MISO is considering an Automatic Penalty Withdrawal and changing the harm demonstration methodology, can MISO consider including a Maximum Cost Exposure for the IC’s (like CAISO) so that there is a maximum cap that IC’s will be responsible for total network upgrades irrespective of whatever happens. Without knowing the maximum cost exposure and if MISO is introducing the automatic penalty withdrawal and harm demonstration, MISO is asking IC’s to taking unknown cost risk. 
4. For errors by MISO and/or TO, MISO shall consider including a Penalty Free Withdrawal option and no Automatic Penalty Withdrawal shall be applied because human errors occur all the time especially due to the volume and IC’s shall not be responsible for paying for these errors. It is unfair to utilize IC’s milestone amounts to cover for other projects’ upgrade cost if the IC’s withdraw due to an error from MISO and/or TO. 
5. SB Energy is generally supportive of the POI site control requirements to reduce the speculative projects to enter the queue. However, MISO shall include Penalty Free Withdrawal options and flexibility for IC’s by providing additional timeline to meet the POI site control requirements if MISO and/or TO is proposing a POI change due to cost and benefits. Moreover, for any changes to POI by the IC that is also approved through Material Modification process (Section 4.4 of Attachment X), MISO shall allow IC’s to submit revised POI site control requirements at any stage of DPP process. Please note that even if IC’s do all the due diligence, there are several factors outside of IC’s control that can make any POI unviable. 
6. MISO should consider applying POI site control requirements to projects in the previous cycles. This will eliminate several speculative projects. 
7. SB Energy generally supports the idea of including a MW cap for a given cycle per region and adding a MW cap per developer. However, MISO should provide the rationale behind the 60% of peak load. What is the assurance that by using this cap percentage that MISO can easily conduct the study? On top of the above MW caps, can MISO also include a total Network Upgrade cost and/or $/MW per region cap for a given cycle to avoid having the IC’s pay for deep Network Upgrades with regional benefits including the load customers? If the network upgrades coming out of the DPP study are deep upgrades with regional benefits (also to load), can MISO filter them to the Transmission Planning process and cost allocate them accordingly? This will reduce the withdrawal rate and make it more reasonable for the IC’s. 
8. MISO mentioned that the study results from prior DPP cycles including DPP 2022 and DPP 2021 are unrealistic given the size of the queue and the unrealistic dispatch of queue projects. MISO should consider plans to clear the prior DPP cycles as well as part of this queue reform effort given there is a possibility that speculative projects would continue to stay in the queue (due to stringent DPP 2023 milestones) in the early DPP phases and can create late-stage withdrawals causing further delays.
9. If there are MISO and/or TO delays, a project may have issues to move forward because of real estate option expiration, local use permit expiration, etc. MISO should consider reducing the withdrawal penalties for IC’s if that type of delays happens to have a fair process among IC’s/MISO/TO.
10. SB Energy still thinks that more detailed stakeholder discussions are needed before a final proposal is presented given the significance of queue reform changes.

Thank you for providing the opportunity to provide feedback.

Duke Response: 

• Any increase in Milestone payments needs to be reasonable.
• Milestone payments that are 100% refundable needs to be reconsidered.
• Need to determine whether a limitation on MWs or a limitation on applicants is a better queue reform.
• Need to clarify whether a cap per developer is Regional, Zonal, Local Balancing Authority, or other.
• [Slide 9] The proposed 60% cap seems reasonable.
• [Slide 10] Exemption needed for Regulated Utilities - Does the 73 GW cap get applied across the MISO region, or is it split by region based on load. If applied across the MISO region, that is 7300 MW cap and it is probably not an issue. If it is split by region based on load, the cap would decrease. As the regulated utility developing solar, wind, storage, CCs, etc. there is the potential we could eat up an allowed cap fairly quickly. As a result, we proposed that the regulated utility should be exempt from the cap based on the need to meet reliability standards, capacity reserves and the generation stated in our IRP.
• Slide 9:  “A safety valve will be necessary to allow projects with a PPA in the cycle if above the cap”

Suggested edit:  “A safety valve will be necessary to allow projects with an assigned off-taker, such as through a PPA or a utility self-developed project, in the cycle if above the cap.  These projects have a higher degree of certainly of moving forward than other projects on average”

NextEra Energy Resources (NextEra) is appreciative of the opportunity to provide feedback on MISO’s Queue Reform proposal presented in the July 19^th Planning Advisory Committee. We acknowledge that there has been unprecedented demand for renewable resources from a variety of customers and in turn historic volume of interconnection applications in MISO. 

NextEra supports solutions that strike the right balance of managing queue cycles and protecting open access and supporting robust competition that will maintain reliability at the lowest cost reasonably possible, while also responding to the customer demand for the resources seeking interconnection on the MISO system.   

The most significant shortcoming of the current proposal is that it does not address or explore the causes for the delays in the current queue cycles (DPP 2019 through DPP 2021) and create a more effective and timely interconnection process.  According to publicly available data in MISO’s public GI Queue, even before the increased demand and the emergence of new incentives to build renewable generation in the Inflation Reduction Act, the MISO queue experienced significant delays.  The average time to complete each cycle has been around four years:

• The 2018 MISO DPP Application window closed in March 2018 with 39.7 Gigawatt (GW)
  • GIAs were all completed in Q2 of 2023 (over 5 years)
• The 2019 MISO DPP Application window closed in April 2019 with 44.1 GW
  • GIAs are not all complete yet. Scheduled to be complete in October of 2023
• The 2020 MISO DPP Application window closed on June 25, 2020 with 50 GW
• GIAs are not all complete yet. Scheduled to be completed in Q2 of 2024 barring further delays

Improving the efficiency of the generation interconnection process is critically important in order to address reliability and economic needs of customers throughout the United States, and in MISO territory. To address the delays in the interconnection process, NextEra would like to propose improvements to the Pre-Queue and DPP Phase 1 work that will aid in reducing the gap between queue application window closure and study work beginning.

1. More staff/consultants to review applications to ensure timely completion or more importantly, automation and data validation to reduce the reliance on staff review of information that is needed to perform application processing and model building
2. Dedicated staff working on developing models in parallel with the applications – as soon as an application is approved, its modeling data would be added to Model On Demand
3. Software and consultants to aid in dispatching models and identifying where severe voltage issues exist and determine where additional reactive support can be added.  SPP currently utilizes a vendor to identify voltage issues which significantly reduces the processing time for model processing
4. Additional reactive support can be replaced with base case network upgrades that can be identified with consultants or MISO staff. This type of mitigation is a reliable approach and is utilized by various RTOs and utilities throughout the United States
5. As discussed in the Workshop on 8/7, MISO confirmed that Phase 1 is an exploratory study and delays are caused by Transmission Owners assessing their own mitigations and cost mitigations on their system. This has proved to be inefficient and time consuming.  NextEra proposes the following suggestion for MISO’s consideration:
   1. Transmission mitigations and cost estimates could be performed consultants or an expanded MISO team to expedite the Phase 1 study
   2. Mitigations could then be reviewed by the Transmission Owners

 In addition to the above:  

-          MISO could invest in improving their existing analysis software to reduce the amount of work needed to be performed. In particular, automation could be developed for voltage analysis, cost allocation in the DPP process and updating the models and input files

-          MISO should require interconnection customers to demonstrate that they have performed its own due diligence around a) injection analysis, b) environmental assessments and c) buildability assessments.

In regard to the proposal presented by MISO, NextEra’s primary concern is with the overall (Megawatt) MW queue cap and the per company queue cap.  

NextEra is opposed to any form of MW caps.  NextEra is one of the largest renewable energy developers in the country and, as such, we often have more projects in the queue than other companies.  NextEra’s development pipeline and projects in the queue are driven by customer demand and imposing a cap on that demand will lead to decreased development and the economic development that comes with that development. Reviewing MISO’s public queue data for the most recent completed DPP cycles, NextEra has demonstrated the ability to build projects at a higher-than-average rate in most years we evaluated.   

• 57.4% of 2015 queue submittals are currently active or built and all have GIAs
  • NextEra completion rate was 70.4%
• 56.1% of 2016 queue submittals are currently active or built and all have GIAs
  • NextEra completion rate was 77.4%
• 34.6% of 2017 queue submittals are currently active or built and all have GIAs
  • NextEra completion rate was 25.6%
• 32.1% of 2018 queue submittals are currently active or built and all have GIAs
  • NextEra completion rate was 26.7%
• 56.3% of 2019 queue submittals are currently active or have GIAs
  • NextEra completion rate is 57.8%
• 52% of 2020 queue submittals are currently active or have GIAs
  • NextEra completion rate is 52%

In the information provided by MISO, there were also inconsistencies with Charles River Associates (CRA) numbers and the MISO public queue. CRA states 17.4 GW remain in 2017 Queues, there appears to only be 13.2 GW remaining. CRA states 13.2 GW in 2018 Queue, there appears to only be 12.8 GW remaining. CRA states 26 GW remains in 2019 Queue, there appears to be 24.8 GW remaining. 2020 cycle has multiple decision points since the presentation was created so it is a few GW less now.

Applying a MW cap to the size of the queue would reduce the number of projects that are completed and ultimately increase customer rates.  In addition, a per company cap is discriminatory as applied to larger developers and appears to be a facially anti-competitive attempt to artificially re-allocate market share away from the most efficient and cost-effective developers like NextEra.  NextEra is not aware of another transmission provider that has artificially limited the queue capacity that can be requested by individual developers.  As demonstrated in our comments above, introducing a MW cap for the queue doesn’t ensure that the DPP studies would be completed in a timely manner but would reduce the number of projects that can be built to meet demand and provide increasingly economic alternatives to existing resources in the market.

MISO clarified in the August 7^th Queue Reform Workshop that in the event the MISO queue applications surpass the cap, the excess MW would be rolled over to the next years queue.  The applications would continue to roll over to the following year’s queue.  In the event this happens applicants would have to be in full compliance in order to maintain the queue positions years in advance resulting in additional uncertainty for the queue applicant and costs associated with maintaining financial security and site control.  

-          How does MISO plan to manage the committed funds or future year’s queue positions?   

-          Are requestors able to submit more than the cap in the event that the queue year is full and applications would subsequently be rolled over the next year?

-          What happens in the event of a customer demand change for a queue position that rolls over to a future queue cycle? Is there a penalty free withdrawal for that type of scenario?

MISO also clarified that the overall megawatt cap would be based on 60% of the peak load for each of the five study zones.  The per developer cap would be based on 10-15% for each study zone.    The bifurcation by zone could potentially exacerbate the issue and exponentially artificially limit economic development and will ultimately harm end consumers that are relying on these projects to lower overall energy costs.  Additionally, MISO selecting load zones and cap limits without understanding the demand from customers seeking clean, affordable and reliable energy supply will negatively impact the economic benefits of NextEra and other developers’ projects.

Finally, providing an exemption from the caps for interconnection customers that are LSEs self-building their own generation is discriminatory by favoring one type of customer versus another and is not consistent with FERC’s draft final rule published on 7/27/23, that reforms the Commission’s standard generator interconnection procedures and agreements to ensure that the pro forma generator interconnection procedures and agreements are just and reasonable and not unduly discriminatory or preferential. 

Increased milestone payments:  NextEra supports increased financial commitments for interconnection customers to enter and remain in the interconnection queue. The magnitude of the increase should be consistent with other RTO/ISOs and closer to $6,000 - $8,000 per MW as the M2 milestone payment.  MISO should also be required to demonstrate how the additional funds would be utilized and the effect those additional funds will have on the reduction of the queue timelines. 

Site control requirements for the Gen-Tie to Point of Interconnection (POI): MISO’s proposal should be consistent with other RTOs and NextEra is supportive of the proposal with an added provision.  In the event that the interconnection customer provides payment of $80,000/mile in lieu of evidence of 50% site control upon application, if the Interconnection Customer subsequently satisfies the applicable Site Control requirement, the amount of financial security should be refunded.    

Penalty Free Withdrawal: Penalty free withdrawal (PFW) should also apply to projects that are withdrawn due to unforeseen circumstances, such as material change in law that prohibits the project to proceed and/or force majeure.  In addition, offering PFW only to the top 10-25% greatest outliers in cost causing projects will result in significant unintended consequences.  MISO has also not provided details on how the harm calculations would be adjusted. Additionally, PFW should also apply to significant increases in Affected System Study costs for MISO projects that impact SPP, PJM and other impacted grids. 

ENGIE North America, Inc. (“ENGIE) appreciates the opportunity to submit these comments in response to MISO ’s proposal for interconnection queue reform

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 operates over four GWs of renewable generation and battery energy storage.

With an increase in generation retirements, many states enacting policies to transition to clean energy and federal incentives provided by the IRA, a large interconnection queue size should be anticipated. Millions of dollars are invested in each project by development companies with the intent to bring projects to commercial operation. Few projects are truly “speculative” in nature, especially projects that have moved further into the interconnection process. There is a tremendous amount of risk and uncertainty in the development process driven by many factors which could lead to withdrawal of projects, some of which are beyond the developer’s control. Some of those factors include changes to the POI, supply chain constraints, local county opposition, inaccurate study results and cost estimates among others. ENGIE NA recognizes the need for some reforms to mitigate queue volume but MISO’s  proposed reforms, are solely targeted at increasing costs and risks to generators. If the proper balance isn’t struck, MISO’s proposal could result in decreased competition, higher costs to load and not enough renewable projects moving forward to meet the policy targets for clean energy.

ENGIE requests that MISO pursue a more balanced approach that includes not only measures to mitigate queue volume but also enhancements to existing interconnection processes that will improve timing and study results. Several areas of MISO’s proposal include details that still need to be developed and require more time. Specifically, applying MW caps to the overall queue and MW caps by company could have unintended consequences that require further consideration and development through the stakeholder process if they are to apply at all. ENGIE encourages MISO to break this reform into two stages and have more discussions around proposals where little or no detail has been provided.

ENGIE supports comments submitted by the Clean Grid Alliance and also raises the following concerns and recommendations below for each section of MISO’s proposal.

 Increases in Milestone Payments

MISO’s proposal  -  Initial Milestone payment (M2) to be increased from $4,000/MW to $12,000 /MW with a corresponding change to M3 and M4

MISO’s proposal to increase milestone payments in M2 to $12K/MW is unreasonably high and could send the wrong signal to developers early in the interconnection process. ENGIE requests MISO adopt a more reasonable approach where higher costs to interconnection customers are balanced with improvements to queue processing timelines and  interconnection studies.

Increase Point of Interconnection POI site control requirements

MISO’s proposal – Increase Point of Interconnection site control requirements

POI site control are highly dependent on factors that are out of generator developers control and would require engagement and commitment by the Transmission Owners (TOs) earlier in the process than is done today. Interconnection customers can’t determine the IC switchyard location until later in the process with agreement from the TO. The proposed site control requirements would create a significant burden on TOs and slow down the interconnection process further. The substation location or configuration of the POI if going into an existing substation can be moved by MISO and TOs and in rarer cases so could the electrical POI.  A penalty free withdrawal option would need to be available to developers in these cases. Under MISO’s current proposal, developers could be kicked out of the queue for reasons completely out of their control. MISO’s existing policy already exceeds FERC’s site control requirements as determined in Order 2023 Final Rule and the proposed changes exceed what has been instituted by other ISO/RTOs.

Withdrawal Penalties

MISO’s proposal – Automatic withdrawal penalties

ENGIE requests that MISO explain how this proposal would work with the current practice of some M2, M3 and M4 being at risk during the process. MISO mentioned providing an example to stakeholders at the August 7^th meeting which would be very helpful.

Penalty Free Withdrawal

MISO’s proposal –  Penalty free withdrawal for greatest outliers in costs (top 10 -25%)

Applying a non-uniform penalty free withdrawal  would create a cascading impact of projects on the edge of the greatest cost outlier boundary getting financially impacted and possibly then withdrawing themselves penalty free when MISO restudies and those projects are then within the greatest cost outlier. This process would create more studies for MISO and financially penalize projects right on the edge of the greatest outliers. This inconsistent application of penalty free withdrawal only to the largest outliers would be unpredictable, create uncertainty and could cause some projects to be not financeable.

MW Caps by GI region and by Company

MISO’s proposal – Set MW caps on applications by GI region and set MW caps for each company. Allow a safety value to allow projects with PPAs in the cycle if above the cap

ENGIE is opposed to artificially limiting the interconnection queue and interconnection customer submissions through MW caps. No company should be artificially capped on their ability to submit and develop projects in the MISO region but this proposal seems to be especially targeted towards large companies and limiting their ability. As noted in the Clean Grid Alliance’s comments, another very concerning factor with MW caps is limiting the transparency into the need and demand for increased backbone transmission in the MISO system since information from the MISO queue is used in planning studies for LRTP.

Allowing projects that exceed the cap to roll over into the next queue cycle will fill up queue cycles potentially for multiple years in the future and could artificially limit generation being developed where it is most needed.

Minimal details have been provided to stakeholders specific to MISO’s proposal for MW caps. More discussion and a thorough stakeholder process is required if a MW cap were to be developed and also to develop how this type of change could be implemented if it is to happen at all.  History  has shown that a smaller queue size doesn’t necessarily equate with shorter queue timelines or better quality projects making it to commercial operation.  

Other changes paired with improvements to the existing interconnection process should be enough to improve queue processing and MISO should evaluate how those changes are working before proceeding with developing caps.

ENGIE does not support a safety valve for PPAs as this could create a competitive benefit for utility projects as compared to IPPs.

In conclusion, ENGIE requests that MISO take the time to implement a balanced approach to queue reform that will improve queue processing without creating unintended consequences and unnecessary barriers to entry to the MISO market.

MISO should pursue a two phased initiative with the first phase being targeted towards low hanging fruit to enhance existing queue processing as has been recommended by stakeholders in prior comments balanced with increased requirements as appropriate. This could allow MISO to file with FERC and reopen the queue window by the end of 2023. A second phase could address more complex reforms and allow more time for stakeholder input.  

ENGIE looks forward to working with MISO on these reforms.

Sincerely,

Margaret Miller

Government and Regulatory Affairs Director – ENGIE NA

While WPPI does not take a position on the specific elements MISO proposes, we comment to note that, to date, MISO has not engaged in substantial open and transparent stakeholder process.  We appreciate that MISO felt time-constrained and believed private consultation with a set of unnamed parties may have been a useful way to develop the proposal, but a truly open and transparent process would have included more stakeholder discussion--including in the stakeholder group devoted to interconnection issues--prior to MISO's unveiling of its proposal.  

The opportunity remains to remedy this situation, however, via serious consideration by MISO of the comments submitted in this feedback request, further engagement with those commenters, and willingness to modify the proposal based on those discussions.  We hope MISO will adopt this course of action.

Clean Grid Alliance Comments on MISO Queue Reform

August 9^th, 2023

Clean Grid Alliance appreciates the opportunity to comment on MISO’s queue reform proposal. We believe that MISO is seeking to saddle interconnection customers with the burden of solving a problem that was created by MISO and its transmission owners, and can only be solved by MISO and its transmission owners themselves. MISO has consistently, with much smaller queue sizes than 70GW, taken 4 - 4.5 years to process a queue cycle, and as a result, needed to reduce the number of queue cycles per year from two to one a few years back. If MISO were able to follow its Tariff timeline in processing the queue, and reinstate two cycles per year, there would be no issue or problem to solve. Furthermore, if MISO’s proposal is adopted, the next few years of queue cycles could get filled up immediately, taking 6-8 years to process a single queue cycle at a time when the need for prompt processing times is the greatest, due to rapid coal retirements and state, utility, and customer demand for clean energy. The slow queue processing time and study practices pose a risk to the MISO Resource Adequacy. Nothing is solved without MISO solving its own problems and including queue reform changes that force the transmission owners to solve theirs. If that is done, nothing more is needed. The delays that prevent MISO from keeping up with the recent (and anticipated) increase in queue activity stem largely from a failure of MISO and its TOs to adequately allocate resources to complete the constraint identification and mitigation aspect of DPP studies in any reasonable amount of time. This introduces extensive delays into the queue process, as do other DPP study practices and approaches. 

In seeking the wrong solution to a problem that only MISO and its own TOs can solve, new problems and issues will be introduced into a process that barely functions today. The cornerstones of the 3-phase process per MISO’s statements and arguments during the Queue Reform efforts of 2014-15 are Penalty Free Withdrawal, easy off-ramps for withdrawals, and “built in restudies”. We absolutely agree. Without these protections from the inaccuracies in studies by both MISO and its transmission owners, there are zero checks and balances on late-stage errors and cost increases that can significantly influence queue outcomes. Interconnection customers will shoulder even more risk, with even less certainty.  The consequence will be unduly discriminatory and preferential treatment for affiliated generation, and higher overall rates to customers due to increased risk and costs in an even longer interconnection process than currently exists in MISO.

While we believe that a completely different approach is absolutely necessary at this point in MISO’s long history of queue reform (dating to 2008), we also feel it is worthwhile to highlight some of the specific flaws in MISO’s current proposal: 

-       Absence of balance – Last month, FERC emphasized in Order No. 2023 the importance of  “balanc[ing] the harm to interconnection customers of interconnection study delays and the associated need to incentivize transmission providers to timely complete interconnection studies with the burdens on transmission providers of conducting interconnection studies and potentially facing penalties for delays, including those that may be caused or exacerbated by factors beyond their control.”^[1]  MISO’s proposal is entirely lopsided, with no incentives or penalties for itself as a transmission provider, or transmission owner.

-       Failure to reflect common shifts in POI beyond the interconnection customers control– Project points of interconnection (POI) regularly are moved by MISO and the transmission owners beyond the interconnection customers’ control up to Phase 2, and sometimes even in Phase 3 or later. Putting punitive measures on interconnection customers for this will not solve any problems and will unnecessarily and ultimately increase costs, withdrawals, and the need for restudies. If MISO insists on including POI site control, it must include a provision under which the relevant transmission owner commits to the POI during the scoping call, and if unilaterally changed, faces punitive measures.

-       Failure to account for differences in state permitting --MISO states have different permitting requirements, including needing to have a queue position prior to seeking easements for interconnection facilities.  This makes MISO’s POI site control requirements incompatible with certain state laws and regulations.  Failure to acknowledge these restrictions will create an impossible situation in some MISO states.

-       Increased Milestone Requirements fail to account for late-stage cost increases– A major issue leading to withdrawals in the MISO DPP process today is the unreliable and widely varying study results upon which major financial and business decisions are based. Results have been highly variable at much smaller queue sizes (on the order of 40GW and less). Any proposal that increases costs and risk, reflected in milestone payments, must unquestionably balance the heavier burden on interconnection customers with strong accountability reforms, including penalties, for MISO and its transmission owners.  

-       Increased Milestone Requirements with removal of security creates undesirable incentives – Removing the zero-dollar M3 or M4 security removes the incentive for developers to locate projects in areas that have transmission capacity. Specifically making interconnection customers pay $1k/MW when the Milestone calculation is zero is unnecessary and harmful. A zero-dollar M3/M4 means the interconnection customer already covered their risks and also that they will not cause any harm to other projects if they withdraw. 

-       Increased Milestone Requirements are overly stringent and unbalanced – MISO’s proposed increases to M2, M3, M4 are unreasonably high, particularly in a proposal that offers absolutely nothing to interconnection customers in return for increase cost and risk, nor addresses the root underlying cause of larger queue cycles (MISO and transmission owner inability to follow the MISO Tariff-prescribed timeline).

-       Changes to Penalty Free Withdrawal would punish interconnection customers for upgrade costs beyond their knowledge or control – The most common cause of generator interconnection project withdrawals is high Network Upgrade costs. This lack of viability is not due to any fault of the interconnection customer, it’s that projects enter and move through the MISO queue taking on cost and risk per the current MISO Tariff, without having studies or knowledge of the Network Upgrade economics of their projects. Penalty Free Withdrawal is the one provision that has made an already high cost and risk scenario, work. MISO’s proposed changes to PFW put higher risk and loss potentials on interconnection customers that will occur, raising the cost of energy significantly and unnecessarily to ratepayers at the end of the day.  MISO’s own comments on FERC’s interconnection NOPR as recently as last year presented a far more workable approach to penalty free withdrawal:

• “MISO does agree however that Interconnection Requests that experience significant cost increases should be able to withdraw without a penalty. MISO has a penalty-free withdrawal provision that can be applied to its harm calculation that is consistent with the proposed requirement.  MISO’s penalty-free withdrawal provision however requires that Interconnection Requests experience an increase that is above a certain threshold in  percentage and cost per MW, whereas the proposed requirement only utilizes the percentage metric. MISO would encourage the Commission to modify the proposed requirement to utilize a cost increase per MW metric or a similar metric.”[2]

-       Changes to Penalty Free Withdrawal will harm project financing – With no project-specific metric for penalty free withdrawal, the risk of penalties will be difficult to estimate.  Projects may not be able to obtain financing, and if they do, it will be much more costly if the provisions around risk are changed from uniform and predictable to non-uniform and unpredictable. Establishing the Network Upgrade cost increase thresholds that apply only to projects with cost increases in the top 25% will result in significant and far reaching negative consequences. Additionally, protections between Phases 1-3 continue to be needed, and thresholds must remain near the 25% level that has long been accepted as a standard. Phases 1-2, 2-3 and 1-3 cost increase thresholds should continue to be established for all interconnection customers and not selectively applied to a limited and unpredictable subgroup of projects within a study group.

-       Automatic Penalty for Withdrawal – Automatic Penalty for Withdrawal under no-harm, creates a challenge in how to fairly allocate the collected funds. Additionally, FERC has upheld a long standing provision of demonstration of harm to similarly or lower queued projects. MISO’s proposal of graduated withdrawal fees even under no harm conditions adds no value and may create a secondary market. 

-       A MW Cap limits transparency – A MW cap will significantly and artificially limit and remove transparency into the need and demand for increased backbone transmission in the MISO system. Often information from the MISO queue is used in planning studies such as RIIA, LRTP, etc. 

-       A MW Cap will deter development where it is most needed – A MW cap can artificially limit generation from being built in the places it is most needed, negatively impacting the MISO market.

-       The PPA Loophole in the MW Cap risks undue discrimination or preference – Allowing projects with PPAs exemptions from the queue cap creates a significant risk that projects owned by a vertically-integrated utility can self-deal to queue jump, while serving to disadvantage IPP projects. This is a highly discriminatory aspect of MISO’s proposal.

-       The Parent Company MW Cap is anti-competitive – A parent company MW cap is anti-competitive and extremely difficult to enforce. Furthermore, some MISO interconnection customer’s parent companies have both an IPP and a regulated utility side. Coordination between these entities could violate FERC rules of conduct, as well as antitrust laws.

-       Transactional Sale Restrictions prior to Phase 2 – Developers engage in mergers and acquisition activity at all phases of development and across multiple markets in one transaction. Having a sale restriction in one part of the country will impede M&A activity in other parts of the country. Additionally, MISO likely lacks the legal authority to interfere in corporate transactions by limiting the sale of projects in the queue.

-       The MISO Stakeholder Process has not meaningfully incorporated feedback, or addressed Order No. 2023 – The MISO stakeholder process has been extremely rushed for such an impactful change and produced a proposal that does not solve the core underlying problem of study delays that have led to an unmanageably large queue in the 2022 DPP cycle. Prior queue reform efforts have involved a year-long effort with robust debate and feedback. Additionally, while MISO has been racing to adopt this “reform” proposal, FERC has significantly changed the pro forma baseline for what a just and reasonable interconnection process will be.  Although MISO can seek independent entity variations as an RTO, MISO’s proposal appears to be in conflict with aspects of FERC Order 2023. We encourage MISO to review/assess/revise is proposal both in regard to Order 2023 and in addressing the root cause of the problem - which is a consistent inability on the part of MISO and its transmission owners to adhere to the Tariff prescribed timeline. 

The only way to address MISO’s interconnection queue issues is to eliminate the delays in the DPP process introduced by MISO and its transmission owners. While no reforms would be needed if MISO’s throughput was higher, MISO has rushed ahead to adopt a severely lopsided package that only puts additional cost and risk on generators, who already meet their timelines and obligations under the Tariff.  Clean Grid Alliance is requesting that MISO work collaboratively with all of its stakeholders on common sense, comprehensive solutions that address the root cause of delays in the interconnection process so that it can meet its Tariff timelines, allowing a 2^nd cycle per year to be reasonably brought back. This will allow for processing of more projects each year to keep up with the demand for decarbonization and Resource Adequacy, as the currently increased queue size is a natural result of an increase in coal retirements and a push to meet state and utility decarbonization goals. 

Sincerely,

Dr. Rhonda Peters

Technical Consultant to Clean Grid Alliance

Re:  Ørsted Feedback on July 19, 2023, Generator Interconnection Queue Improvements

 Please accept the following comments in response to MISO’s July 19, 2023, presentation on interconnection queue reforms.  Ørsted is a leader in renewable energy and, either directly or through its affiliates, develops, constructs, owns, and operates offshore and onshore wind resources, solar farms, battery storage and offshore transmission facilities.  Currently, Ørsted has 5 GW of offshore wind in development and 4 GW of onshore wind, solar and storage, either in operation or under construction in the United States.  In MISO, Orsted has 424 MW of wind generation across two wind farms in operation and another 3GW of wind, solar, and storage in various stages of MISO interconnection queue.  Given this commitment to participating in MISO, Orsted is directly impacted by changes to the interconnection process.  Orsted supports efforts to reduce the number of speculative projects in the queue and to reduce queue backlog.  To that end, MISO put forth proposals for comment on July 19 and has indicted that it would like to make a filing with FERC this fall. 

 Specifically, MISO proposes to (1) increase M2, M3, and M4 milestone payments; (2) improve site control requirements for the Point of Interconnection (POI); (3) introduce an escalating automatic penalty upon withdrawal; requires an adjustment to meaning of harm; (4) adjust penalty free withdrawal provisions to simplify calculation and reduce availability; (5) set limitation on the number of MWs that will be allowed in future cycles; and (6) limitation on the number of MWs any one developer can submit into a future cycle. 

 As discussed below in response to each proposal, Orsted is concerned that the proposed reforms do not fully address the issues as the proposal focuses solely on increasing responsibilities for the interconnection customer.  It should be noted that not all delays are within the control of the interconnection customer and that additional requirements on other stakeholders will be needed to address the identified issues. 

 1. Increase Milestone Payments

 Ørsted does not support MISO proposal to increase the milestone payments for M2 from $4000/MW to $12000/MW with corresponding increases to M3 and M4.  Orsted does not oppose a gradual increase in milestone payments that are reflective of risks imposed on the system.  The proposed increase is substantial and could be a barrier to entry for viable projects.  Increasing milestone payments without corresponding changes that increase the reliability of study results will not fully address the issue.  Of import, MISO should accept letters of credit for the milestone payments.

2.  Site Control Requirements

MISO proposes increased site control requirements upon application and prior to Phase 2 with 100% site control of the point of interconnection and the interconnection customer switchyard, if necessary, prior to GIA negotiations. The proposal does not address a number of issues that can prevent having point of interconnection site control at the application phase and event Phase 2.  This includes delays caused by the transmission owner in providing necessary clarity. 

Of import in providing certainty in site control is the need for increased communication between the transmission owner and the interconnection customer.  If MISO would like to implement increased site control requirements, then there needs to be a level of certainty that the transmission owner has agreed to the point of interconnection before the cluster study begins and to which the transmssion owner cannot subsequently require a change.  To facilitate this communication, the transmission owner and interconnection customer should participate in an informational meeting prior to the filing of the application.  This meeting is especially important if MISO moves forward with its proposal to require 50% site control from generator site to point of interconnection at time of the application.  There should also be some sharing of responsibility for determining the point of interconnection.  To ensure that there is cooperation and coordination, the transmission owner should be subject to financial penalties if they do not sign off on the point of interconnection prior to the cluster study.  As MISO contemplates increased requirements and penalties to be imposed on interconnection customers, it is important that there be some level of shared responsibility and process to ensure that the decision points can be met and that the interconnection customer is not held unduly responsible for issues that need approval from the transmission owner or information from MISO.

In conjunction with increased responsibilities for the transmission owners, Orsted proposes the following modifications to MISO’s proposal to increase site control requirements:

• Remove proposal to have 50% site control from generator site to point of interconnection in the application;
• Support 50% site control from generator site to point of interconnection but not require 50% of interconnection customer switchyard;

• Support proposal 100% site control from generator to point of interconnection including interconnection customer switchyard, if necessary, at GIA execution

 3. Withdrawal Penalties

Any imposition of withdrawal penalties should be consistent with the exceptions provided in Order No. 2023. In addition, increased transparency of network upgrades costs will also address withdrawals.  Any penalties assessed should initially be drawn against the study deposit

4. Limitation on Number of MWs Allowed in Future Cycles

 Ørsted appreciates the need to have a manageable queue size but does not believe that setting a limit on the queue cap is the answer.  The focus of any reforms should be on ensuring that the projects in the queue are the ones that are going to get built.  The first-come first-serve proposal of meeting the queue cap will not help address this issue as developers rush to join the queue in order to avoid project delays.  Rather than a queue cap, MISO should focus on ensuring quality of proposed projects rather than reducing quantity as focusing on the former will reduce the latter while providing more certainty.

 5. Limitation on Number of MWs Any Developer Can Submit in a Future Cycle. 

Ørsted does not support creating a per company cap on the number of projects that can be submitted as the focus should be on the quality of the projects (ensuring that the projects submitted will be built) not quantity of projects submitted. 

Similar to the site control requirement milestones, MISO could consider requiring developers to consider submitting additional development studies prior to and during the interconnection process.  Subject to further discussion, these studies cold include wetland or environmental review for example. 

In addition, since MISO issued its proposal, FERC issued Order No. 2023 with interconnection reforms applicable to all Transmission Providers.  It is unclear from the stated timeline, how MISO plans to review its rules to ensure compliance with the FERC order.  Orsted encourages MISO to review/assess/revise is proposal both in regard to comments received in response to the July 19 proposal and Order No.  2023.   Thank you for the opportunity to submit comments on this important issue.  We look forward to continuing the discussion.

 Respectfully Submitted,

 Lopa Parikh, Head of Electricity Policy

 lpari@orsted.com

 (857) 291- 6592

The Environmental Sector appreciates the opportunity to provide these comments and acknowledges many of the issues MISO has cited in its justification for interconnection queue (IQ) reforms to ensure a workable IQ process that better ensures projects entering the queue are likely to complete the process and interconnect to the grid. We do, however, take issue with the tenor of recent discussions that look solely to project developers as the cause of MISO’s current IQ issues. Interconnection requests are a direct response to the significant demand for new resources, whether stemming from a desire to access cleaner or cheaper resources, resource adequacy needs, state requirements, or otherwise. The currently unmanageable state of the queue is also a direct result of persistent study delays on the part of both MISO and the Transmission Owners (TOs), MISO’s transition from two DPP cycles per year to just one, as well as factors outside the influence of MISO or its stakeholders. (Footnote1) Quickly and effectively interconnecting new cost effective, cleaner resources should be a shared goal of MISO and its stakeholders. Painting interconnection customers as the adversary in IQ reform efforts is neither constructive nor appropriate. 

That being said, the Environmental Sector encourages MISO (and all stakeholders) to think more holistically about its goals for IQ reform and adjust the currently proposed reforms accordingly. At this point, we are not convinced that MISO has adequately considered the impacts of its proposed reforms in the broader context of the resource fleet transition that we are in the midst of. As a result, MISO risks IQ reforms that ultimately are not compatible with industry trends, the plans of its member states and load serving entities, or MISO’s responsibilities to its members and consumers more generally. 

To better inform the ongoing discussion, the Environmental Sector offers several goals for IQ reform and concerns with MISO’s current proposal that must be considered before reforms ultimately move forward. We also offer some specific recommendations that will help address these concerns and put MISO on a path to an IQ process that is durable, legal, and workable for MISO and its stakeholders. 

GOALS FOR QUEUE REFORM:  

1. Reopen the 2023 Queue Cycle quickly. The ongoing delay of the 2023 queue cycle is only exacerbating the issues MISO is trying to solve. Delaying the 2023 queue cycle beyond early 2024 should not be considered a viable option even as MISO must continue to work with stakeholders on meaningful reforms. Therefore, we request that MISO consider interim changes to enable a quick reopening of the 2023 cycle with longer-term improvements coming later.

2. An IQ process that limits speculative projects entering the queue while attracting projects that are ready to move forward. While we appreciate MISO’s desire to limit speculative projects from entering the queue, it must also be mindful that any reforms must be workable for those projects that are ready to move forward. To that end, we request the following be included in any queue reforms:

• More information to developers up front so that they can make meaningful decisions about whether to enter the queue, including the facilitation of more robust pre-queue communication between developers and TO’s.

• No retroactive application of the new reforms to those that have already entered prior queues.

• Some level of flexibility for penalty-free withdrawal to account for circumstances beyond a developer’s control, such as when a point of interconnection (POI) is changed by MISO or a TO and the change results in an increase in cost above some reasonable threshold. 

3. An IQ process that meets the needs of MISO members and states. Given states' and utilities’ goals for carbon emission reductions and/or clean energy additions, we are concerned that the MISO proposal - and in particular its proposed MW cap on the size of any one queue cycle - will not evaluate annually the volume of new generation that is needed for utilities and states to meet those goals, much less in a way that fosters competition to achieve a more cost-effective resource supply. 

Based on MISO data presented at the March 10th LRTP workshop regarding Future 2A installed capacity additions, MISO anticipates an average of 14.3 GW of new wind, solar, and storage to come online annually between 2023 and 2042 to meet the various clean energy commitments and replace more costly resources across its footprint. Looking at the 2019 DPP cycle - the most recent cycle we can reasonably assume nearly all projects are in some fashion concluded - approximately 17 percent of wind and solar (on a MW basis) in the queue succeeded through the queue and is either in operation or under construction. (Calculations available upon request.) 

At this 17 percent success rate, 84 GW of new clean energy resources will need to enter the queue each year to meet MISO projections, making up 115 percent of MISO’s 73-GW proposed queue cap. Even assuming queue reforms result in some improvements in clean energy success rates, the 73 GW cap will invariably exclude more cost-effective clean energy resources and/or those with important grid reliability attributes. This will ultimately drive up the costs of the clean energy transition and leave MISO states and utilities scrambling to meet their clean energy objectives.  

To help ensure an IQ that is responsive to the pace and scale of the resource transition, MISO should consider a return to their practice of two interconnection cycles per year to allow for the evaluation of more applications each year and to enable a larger, more diverse set of resources to move forward annually. 

Ultimately, however, MISO must also take steps to enable the transformation of the grid more quickly, and that includes changes in the IQ modeling processes and not simply reducing the size of the IQ. Numerous studies find that reliability in a high-renewable system is supported by having wind and solar resources with nameplate capacity well above system peaks. Such configurations both manage weather variability and allow renewables to serve high percentages of load during times with non-ideal sunlight or wind. Curtailment and/or export of renewable energy is likely to become routine.

Interconnection studies must adapt to this and incorporate realistic expectations regarding curtailments and operational practices. This will require changing to modeling practices to accommodate nameplate capacities in excess of peak load in each region, with more appropriate modeling assumptions for curtailment, exports, and the use of storage and hybrid resources under high-renewable energy scenarios. To that end, we urge MISO to:

• undertake a process to identify future IQ modeling needs and gaps in MISO’s current capabilities, and

• allocate any additional revenues collected as part of the increase in fees within the IQ process to modeling process improvements, e.g. purchasing new models or hiring additional staff/consultants. 

4. An IQ process that meets the needs of the MISO system. MISO has been emphasizing the need for new resources to come online quickly to replace the retiring generation. But simply looking at the nameplate capacity of the new resources does not reflect the amount of energy they will deliver to the grid or the contributions of those resources to resource adequacy or reliability. 

Capping the volume of MWs in each region based on a first-come, nameplate capacity basis could lead to an imbalance in the type of resources moving through the IQ Cycle and contribute to an inefficient resource mix or exacerbate issues in securing the necessary grid reliability or resource adequacy attributes that the system needs for reliability. 

MISO’s proposed queue reforms - in particular its proposed MW-based cap on the size of the queue - also conflicts with and raises the urgency of multiple initiatives of MISO’s Reliability Imperative. As MISO calls for more resources to replace retiring resources and embarks on stakeholder processes to identify, value, and ultimately create market structures to incentivize a number of system attributes that it deems necessary to maintain reliability, these IQ reforms significantly narrow the window through which MISO is able to procure these resources. In particular, MISO’s cap approach could exacerbate the adoption of storage and hybrid resources at the very moment that those resources would address the needs MISO is emphasizing in its Reliability Imperative initiatives. 

5. An IQ process that meets FERC standards. Lastly, we want to emphasize that any reforms coming out of this process must align with the requirements of FERC Order-2023. This will, of course, improve the likelihood of FERC approval, but also help avoid ongoing confusion and unnecessary delay in the development of MISO’s O-2023 compliance plan and implementation. To this end, we request MISO include in its presentation of final reforms to stakeholders an assessment of how these reforms advance (or at least don’t conflict with) O-2023 requirements. Of particular concern is MISO’s proposal to cap each queue based a first-come basis that appears counter to the Order 2023 elimination of first-come first-served approach to queue management, the requirement that “all interconnection requests studied in a single cluster shall be considered to have equal queue priority” (O-2023, p264) and the Order 2023 cluster process generally (204-205). 

We appreciate MISO’s consideration of these comments as we continue to seek out queue reforms that are workable, durable, and legal. We look forward to the ongoing discussions.

Footnote 1: MISO’s consistent failure to meet its own study timeline requirements and the lack of accountability on Transmission Owners to complete studies and identify network upgrades in a timely manner is forcing more speculative projects into the queue because of a perceived need to enter the queue as much as five years before projected project construction. Further, the switch from two DPP cycles annually to one further drives more projects into a single queue.

NG Renewables agrees that projects entering the queue should be adequately prepared, many of the criteria are arbitrary and do not reflect project viability. There were significant delays in the 2018, 2019 and 2020 study cycles for the different regions of the MISO footprint, and these delays were not caused by the queue size, rather by delays and errors from the MISO and Transmission Owners’ side. While project eligibility requirements are an obvious means of potentially improving queue efficiency, history has shown that such changes are certainly not a “cure”, and at best provide marginal mitigation value.  Accordingly, other avenues should be considered as well.  For example, are there possible actions transmission owners could take, or improvements to study modeling that could offer significant potential improvements on the table?  At a minimum these additional options should be reviewed along with participation/eligibility requirements to ensure MISO utilizes the most effective mitigation means and minimizes the potential for unintended and inequitable consequences that directly or indirectly block viable projects with no real queue processing improvements.

NG Renewables notes several additions that should be considered to adequately utilize the full scope of options available to MISO in improving the efficacy of each queue cycle.

1. Additional queue cycles
   1. NG Renewables appreciates that the size of each study cycle should be limited given the difficulties with solving for very large queues. That said, MISO should try to process a comparable number of applications annually. Therefore, MISO should return to a 2 cycle per year construct (or similar) to process a comparable number of applications.
2. Dispatch methodology reform
   1. Another mitigation tool that must be considered in this reform or in a subsequent roadmap item is the current methodology utilized by MISO to evaluate GI Projects. Currently, MISO dispatches the GI projects being evaluated against all MISO generation. While this methodology was acceptable over the past 15 years, yet with the increased size of the GI queues, it is impossible from a modeling standpoint to adequately evaluate the current level of the GI queue nameplate capacity. We would suggest moving towards a study methodology that utilizes study cases that resemble MTEP models and allow the markets to deal with upgrades.  

With respect to the specifics of the MISO proposal, NG Renewables offer the following comments:

1. Increase milestone payments.
   1. Milestone payments can be used to incentivize developer diversity more efficiently than an administrative developer cap. MISO should raise the M2 payment from $4k to $6k per MW for the first 8,000MW a developer submits per cycle. After that 8,000MW threshold, any additional MW submitted by the same developer in the same cycle should be charged the proposed $12,000 per MW.  This 8,000MW is relative to the proposed 10% load developer cap and offers an economic incentive to prioritize projects that are closer to “shovel ready” without risk without preventing high quality.
   2. If MISO is requiring significantly more capital from interconnection customers, it must demonstrate how those funds will be used to improve the interconnection process beyond a check and balance on queue participation/eligibility. MISO should use additional funds to employ consultants or hire additional staff to expedite the processing time of queue cycles.
2. Improve site control requirements.
   1. As referenced above- site control requirements to a POI are not an effective measure of how viable a project is, nor should it be a requirement of the IC queue cycle. If anything, the requirements relative to the POI issue should apply to the transmission owner. Each Transmission Owner (TO) should be required to attest to the viability of a POI upon the entry of a project to the queue. If the availability of that POI changes during the study, the interconnection customer should not be held liable for this change.
3. Adjust “harm calculation”, Increase penalties for withdrawals.
   1. MISO should present to stakeholders the current methodology for harm calculation and how specifically they plan on changing the harm calculations. Tariff language on this appears to be vague and it would be helpful to have more context on this front.  This is a rate charged to customers and must be clearly articulated.  Once the methodology is clearly explained, MISO should allow for adequate process for stakeholder comment/input.
   2. MISO should not change the threshold or methodology currently utilized for penalty free withdrawals. If MISO’s goal is ensuring only quality projects remain in the queue, removing penalty free withdrawals will only incentivize the projects that MISO is concerned about to stay in the queue and bank on other projects dropping rather than dropping out and recouping their funds.
4. Cap MW per cycle
   1. NG Renewables agrees that there must be some control over the MW size of each cycle to ensure that the models used in each study can solve. The intention behind this cap should be to ensure study feasibility, not to arbitrarily limit project applications. NG Renewables agrees that a cap of 60% peak load could be an appropriate number.  However, as a general matter, once an appropriate basis for a cap is determined, access to the queue should be based on competitive pressures to the maximum extent possible – administrative management should be avoided wherever possible.
5. Cap MW per developer
   1. MISO is considering methods to maintain some equity between larger and smaller developers. However, as noted above, administrative solutions such as arbitrary limits should be avoided.  NG renewables suggests that MISO uses an escalating $/MW milestone payment cost based on what % of the total queue MW a developer occupies. NG Renewables suggests a cost of $6,000 per MW until the 10% threshold is reached, and then raised the deposit cost to $12,000 per MW. This will provide a mechanism for limiting projects per queue while also providing an avenue to include truly viable projects.

 Finally, at a high level, as noted in the above specific comments, administrative solutions are rarely efficient and often age poorly as market conditions change. In general, MISO should be pursuing competitive solutions to interconnection queue reform wherever possible. Instead of choosing rigid, administrative boundaries that dictate winners and losers in the queue, MISO should give a range of options that allow developers to make educated decisions about the value of their projects.

Beyond competitive aspects of queue processing that should lie with developers, MISO should make every effort to pursue study improvements that reduce processing time. MISO should also look for opportunities to ensure transmission owners provide adequate pre-screening processes, study improvements, and communication with interconnection customers. NG Renewables looks forward to continued discussion around these issues over a longer, more appropriate time frame.

DTE appreciates the opportunity to provide feedback on MISO’s Generator Interconnection Queue Improvement Proposals.  We commend MISO for working proactively to address the backlog in the queue so that generation is brought online at the pace of market needs.  Although we appreciate the efforts, we would like for MISO to provide more clarity to stakeholders on how the proposals will be executed once adopted.  For example, as MISO establishes its policy around penalty free withdrawals, how will the cost of distribution driven affected systems be treated?  Will these costs be included or excluded from the penalty free withdrawal provision.  Also, how will the new proposal impact the current projects in the queue?  Would they be excluded from the automatic withdrawal penalties?  Is there a transition plan?  As MISO develops its policy for withdrawal penalties, how will external activities such as the developers permitting strategies be considered?  In many cases projects are entered into the queue while developers are still working on development activities such as permitting which (depending on the project type) could have a shelf life that may or may not coincide with the MISO queue timeline.  Lastly, related to the limits that MISO is proposing for the queue and individual developers, DTE would like for MISO to provide clarity on how these limits will align if at all with Integrated Resource Plans (IRP) that have been submitted by the utility companies.  Will the policy include provisions that will allow utilities to meet the obligations of their respective IRP’s considering the limitations that are being proposed on the queue overall as well as the individual developers?

Again, DTE recognizes and appreciates MISO’s efforts to reduce the backlog and improve cycle times and although we feel these proposal could work towards that goal, we would like for MISO to provide more clarity to stakeholders around the questions above before moving forward with a filing to the FERC.         

North Dakota is in support of efforts to improve MISO’s Generator Interconnection Queue through increasing the milestone payments, adjusting the penalty free withdrawal provisions, and implementing an escalating automatic withdrawal penalty in order to reduce the number of speculative projects. However, we are unsure of the full implications for site control requirements and setting limitations on MWs that can be submitted to the queue, and if this would have any unintended consequences. 

North Dakota is very concerned with the pace of resource retirements within MISO and understands the necessity for the queue to be reformed in size to function efficiently allowing replacement generation to be constructed in a timely manner.    However, implementing too many changes at once may possibly impact the queue by reducing its size too much and not allowing the construction of needed replacement generation. The correct balance is necessary for MISO to maintain a robust generation fleet. 

As MISO is aware, an ad hoc group of cross-sector stakeholders collaboratively developed a proposed reform framework for MISO’s consideration in advance of the July 19 Planning Advisory Committee (PAC) meeting, and many of the elements of MISO’s proposal are consistent with the ad-hoc group’s proposed framework.  The list of stakeholder companies that participated in the ad-hoc group and signed onto these comments is included at the end of this feedback, and the proposal reflects input received from many other stakeholders as well.  We greatly appreciate the opportunity to provide feedback on MISO’s proposal in addition to all of MISO’s outreach efforts and openness to stakeholder input thus far.  The group offers the following comments on MISO’s proposed Queue Reform package and recommends process improvements to ensure a fair and equitable Generator Interconnection Process (GIP) that incentivizes and rewards ready projects and facilitates the efficient interconnection of new resources in MISO.

MISO’s proposed Queue Reform package is expressly intended to “reduce the volume of future cycles to enable faster and more certain study results earlier” and includes the following elements:

• Increased milestone payments,
• The introduction of progressively increasing Site Control requirements relating to the requested POI,
• “Automatic penalties” for withdrawals,
• A cap on the number of MW in each queue cycle and
  • A cap on the number of MW each parent entity can have in a queue cycle.

MISO’s proposed adjustments to Milestone payments:

• M2 (prior to study kick off) = Increase from $4k/MW to $12k/MW
• M3 (at DP 1) = Greater of (20% of Network Upgrades (NUs) – M2) or $1,000/MW
• M4 (at DP2) = Greater of (30% of NUs – M3) or $1,000/MW)

While increased financial milestones may reduce Interconnection Request (IR) submissions, MISO acknowledges the desired outcome is not certain to result from this change, and there may be unintended consequences to increasing the cost and risk associated with participation in MISO’s GIP such as increased carrying costs of M2 payments will eventually roll into customer rates.  Therefore, we do not support increased milestone payments.

At the July PAC meeting, MISO compared SPP’s recent increase in FS1 and FS2 payments to MISO’s proposed increase in M2 (entry) payments, describing SPP’s new requirements as “$8k/MW” at entry.  However, per SPP’s filing, the FS1 payment (like MISO’s M2) increased from $2k/MW to $4k/MW, but the FS2 $4k/MW payment is required for the project to progress from Phase 1 to Phase 2, like MISO’s M3.  (See page 8 of FERC’s Order).  SPP’s GIP entry costs, as recently approved by FERC, are now equal to MISO’s current entry costs.

As noted above, in addition to the potential ineffectiveness of increased entry Milestone payments to limit the MW submitted to each study cycle, the ad-hoc group is concerned the proposed increase to Milestone payments does not provide additional benefits to Interconnection Customers (ICs) or the ultimate consumers of the energy produced by these new resources. 

• Increased Milestone payments are expected to have a disproportionate impact on utilities’ ability to meet their load-serving and Resource Adequacy obligations as utilities may rely on large projects getting through MISO’s queue. 
• Due to the carrying costs of capital, a higher M2, which is collected prior to study kick-off, will also negatively impact the price of the project, ultimately increasing costs to consumers and does not incentivize early withdrawal of non-viable projects.
• A higher upfront payment incentivizes ICs to stay longer in the GI study process because they've already made the large financial decision prior to the subsequent Decision Point.  A lower up-front payment followed by larger payments at DP1 and DP2 forces customers to re-evaluate at each Decision Point.

To address these concerns, we offer the following recommendations:

• We ask MISO to explain in detail the ways the proposed increase in Milestone payments will facilitate achieving the above-stated goals.
  • Provide MISO’s data and rationale supporting the M2 increase to $12k/MW.
  • The CRA Report (slide 15) indicates the average of NU cost per MW in Phase 3 has increased significantly from 2017 to 2020 but has yet to reach the implied $100k/MW NU tolerance referenced by MISO in presentations to the PAC and IPWG on this topic.  CRA’s rationale for increasing the NU payments is to “be more representative of the final NU payment and significant enough to discourage speculative behavior and reflect the amount of potential harm (to other ICs) due to withdrawal.”
  • CRA’s analysis does not provide any support for a three-fold increase in current M2 requirements, it merely suggests that MISO charge a minimum of 15% of reasonably anticipated NU costs. 
  • While this is certainly a significant increase from the $4000/MW entry Milestones MISO and SPP charge now, the justification for the magnitude of the proposed increase has not been demonstrated to be just or reasonable, or to be likely to result in the desired outcome of reducing the demand on the queue, driven by many factors including those listed below:
    • Demand for renewable energy.
    • Financial incentives to entry (Production and Investment Tax Credits for development of renewable energy resources).
    • Use of queue to investigate the viability of POIs.
    • Dominate the GIP.
    • We suggest MISO look at instituting a cap on M2 total payment (perhaps based on M2) at the 500 MW IR level to mitigate adverse impacts to MISO LSEs who must maintain sufficient generation to serve their load and meet MISO’s Resource Adequacy requirements, which include a Reserve Margin and Zonal Resource Clearing requirements. 
    • M2 milestones should only be forfeited if the IC withdraws for reasons that should have been identified by the IC before queue entry through pre-queue due diligence as confirmed by the IC at entry (e.g., potential upgrades seen in the tool and any limiting factors identified by the TO or MISO in prior studies at that POI in accordance with enhanced entry requirements).
    • Consider increasing M3 and M4 and their refundability rather than increasing M2, as this could be a more effective way to incentivize non-viable projects to withdraw earlier, when the withdrawal has the least potential to harm other projects in the study and increases risk as a project progresses through the queue thus better reflecting the potential for a withdrawal to have a negative impact on other projects in the study.

MISO proposes to impose new Site Control requirements for the Point of Interconnection (POI) as follows:

• 50% Site Control from generator site to POI upon application, or $80,000/mile for the entire line mileage to POI
• 50% Site Control from generator site to POI and 50% of IC switchyard, if necessary, prior to Phase 2
• 100% Site Control from generator to POI, including IC switchyard, if necessary, prior to GIA Negotiations

MISO proposed for the Site Control requirement upon application to apply to the “line-of-sight” route.  With good TO/IC pre-queue meetings, a “line-of-sight” route can be refined to the actual route; however, “line-of-sight” may not be a good assumption.  If POI and Interconnection Facility Site Control requirements are included in the final package of reforms, $80k/mile is reasonable. 

As described in more detail below, MISO’s proposal to include POI and Interconnection Facilities Site Control is concerning, and refinements are recommended.

The ad-hoc group offers the following refinements to Site Control requirements:

• Incorporate pre-queue POI transparency improvements and increased IC due-diligence requirements, described in detail in the “Recommended Process Improvements” section below.
• Requiring Site Control for the generator at the time of entry, rather than “prior to study kick-off” would be a more reasonable and effective approach to modifying current POI Site Control requirements.
• The ad-hoc group recommends that, at the application stage, the IC should be required to demonstrate that they have a viable pathway to the requested POI but should not be required to demonstrate any physical Site Control to the POI until at least Decision Point 2, after the stability and voltage issues have been evaluated in the study process as the TO may recommend moving the POI due to issues identified in the Study.
• The requirement for 50% of switchyard is not feasible as this is an “all or nothing” component of the site design.
• Requiring 100% Site Control prior to GIA negotiations is overly restrictive and may not be feasible due to local permitting and other project approval process requirements, but the ad-hoc group recognizes a high standard should be applied at this point in the process and recommends that MISO’s requirements allow for some flexibility. 
  • There must be a waiver provision when regulatory or permitting processes prevent obtaining required Site Control.

MISO proposes to limit the number of MW allowed in future queue cycles to 60% of Peak Load. 

At the July PAC meeting, MISO indicated that this cap would be allocated to subregional DPP study areas based on a pro rata MW share of Peak Load.  MISO also discussed potentially establishing an additional cap on the number of projects in each queue cycle and indicated a safety-valve provision may be included to allow utilities with certain projects to enter a queue cycle and violate the MW cap.  A similar safety-valve provision may be given to resources that can demonstrate a “committed” off-taker.  The ad-hoc group supports further discussion of these ideas.

The ad-hoc group supports capping the number of MW included in DPP studies and contends this element is necessary to achieve the desired outcome of reasonable and realistic generator interconnection studies.  We appreciate that MISO’s proposal includes caps per DPP subregion based on an appropriate percentage of Peak Load and recommend MISO work with the TOs to establish the subregional DPP caps.  We understand the challenges associated with studying more generation than there is load on the system and the need to limit queue sizes based on load and suggest MISO also recognize the attribute needs in the resource mix being studied to ensure the attribute needs identified by MISO’s Resource Adequacy team will be met to ensure continued system reliability.  Ultimately, a MW cap will reduce the scope of NUs, accelerate the pace of study, and provide a more reasonable view of Transmission System needs in the 5-year horizon.  

Regarding the cap as applied to each study area, that limit should consider factors that may result in a lower limit in that study area such as:

• Import & Export limits relative to load
• LSE Resource Adequacy requirements
• Other relevant factors that may be identified by the TO or MISO

For MISO South, for example, a major limitation to the amount of new generation that can be studied is that the existing and prior-queued generation cannot be re-dispatched to another DPP Study Area due to the North-South constraint. 

Along with the MW cap on queue size, MISO also proposes to cap the number of MW any one parent entity can submit in future queue cycles to 10% of the systemwide cap.  The ad-hoc group generally supports this concept though individual companies may have different views on optimal implementation approaches.  Access to the queue is important for many reasons including ensuring that consumers get the best project possible. 

MISO proposes to introduce an “automatic penalty” upon withdrawal (as detailed below) and to adjust the definition of “harm”.

• 10% of M2 if withdrawn prior to DPP start (would be removed if cap is not part of final solution).
• See slide 16 of CRA presentation. 
  • 25% of M2 if withdrawn at Decision Point 1 (DP1).
  • 50% of M2 if withdrawn at DP2.
  • 75% of M2 if withdrawn during DPP Phase III.
  • 100% of M2 if withdrawn during GIA negotiations and beyond.
  • Penalty payments will be used to offset the NU costs of projects that execute a GIA or reach their Commercial Operation Date (COD). 
  • MISO is still working through these details, but penalties will likely offset NU costs at COD rather than GIA execution.

MISO proposes to adjust the Penalty Free Withdrawal (PFW) provisions to simplify the calculation and reduce availability, and the ad-hoc group supports this idea and specifically prefers increasing the NU $/MW threshold rather than increasing the percentage of NU cost increases. 

Suggested refinements to Withdrawal Penalties Provisions

The ad-hoc group agrees that changes to the Harm definition and calculation could be beneficial in achieving the stated goal; however, the “automatic penalty” of 10% prior to study start is overly punitive.  Assuming that Queue entry requirements are tailored to demonstrate IC due diligence prior to entering the queue, validated by MISO using D1 and D2 study deposits used to offset the additional “work” caused by withdrawals prior to Phase I study start, these early withdrawals cause minimal harm and help other projects through the proposed back-fill process.  Withdrawals prior to study start are desired over a non-viable project languishing in the queue in the hope of qualifying for PFW or more favorable study results in later Phases.  There is little connection between dollars at risk and project viability, and projects could withdraw without causing any harm to remaining projects yet still be required to pay the “automatic penalty”.  The ad-hoc group generally does not support withdrawal penalties that disincentivize withdrawal for good reasons beyond the control of the ICs.  The proposed automatic penalty of 10% prior to study start and 25% if withdrawn at DP1 are generally not supported. 

Recommended Process Improvements

In addition to the suggested modifications to MISO’s proposed reforms, the ad-hoc group stresses the need to include process improvements in the package of reforms that focus on providing more information regarding POIs prior to application-submission to assist in the ICs’ pre-queue due diligence efforts and support enhanced queue entry requirements, as described in more detail below.  

The ad-hoc group offers the following minor process enhancements necessary to support, facilitate, and ensure the success of MISO’s proposal:

• Pre-queue due diligence requirements supported by increased transparency
• The IC should be required to verify the preferred POI is a transmission facility included in either MISO’s Appendix H list of transmission facilities that have transferred functional control or MISO’s Appendix G list of transmission facilities that have not transferred function control but are subject to the Agency Agreement of the Transmission Owners Agreement.  If the POI transmission facility is not included in either MISO Appendix H or Appendix G, the IC must choose a different POI after the study has kicked off, which wastes resources.  The POI tool should be a definitive source of the POI facilities available for MISO interconnection.
• Formalize the IC POI “viability” inquiry process currently available to ICs under MISO’s tariff.
  • Create a standardized IC inquiry form that would also be used to verify the IC has done due diligence in selecting the POI, since the mandatory pre-queue calls were eliminated.
  • Require pre-queue communication between IC and TO.
  • Update POI tool in real-time
    • Update POI tool to include interconnection facility constraints or requirements.
    • Add high-level costs and limitations at a substation in the POI Tool from the Cost Estimation Guide.
    • Post to the POI Tool the past TO responses to IC inquiries regarding POI viability with any sensitive details posted to a platform that has protected access (e.g., fiber requirements and associated costs would be useful).
      • Require the IC to demonstrate it has performed appropriate analysis to validate the viability of the POI prior to queue entry to demonstrate feasibility or require additional deposit if IC does not include results with their application or if results demonstrate the requested POI has complications identified by the TO or prior studies.
      • Improvements at Queue entry
    • Make the POI and MW of submitted projects visible prior to the application deadline to offer another data point to inform subsequently submitted IRs.  It might be appropriate to limit availability to other ICs only. 
    • This could be achieved through a portal or the POI tool, and information should be redacted so as not to put a developer at a disadvantage when seeking Right of Way (ROW) options or a buyer for their generation.
    • Identify and provide high level estimates of upgrades that are certain to be required based on the MW at the requested POI sooner in the process (i.e., mitigation requirements identified through pre-queue due diligence, in Scoping, or in a prior study or study  phase), which could support higher M3 and M4 Milestones and increased “at risk” portion of these payments tied to the harm caused to other ICs by late stage withdrawals. 
      • Require IC acknowledgement of scoping call & form comments through a formalized process (use of portal for receipt and acknowledgement of project review form completed by the TO, now in advance of or potentially instead of a Scoping Call).
    • Currently, developers may choose to remain in the queue longer since they are not required to acknowledge information prior to the scoping call that materially impacts their project.
      • Queue & study cycle Sequencing
    • A new study cycle should not kick off until the prior cycle is at least ready to start Phase II.  This refers to the actual study (model) and does not refer to the application validation, etc., which should begin as soon as possible and ideally prior to study kick off.
      • The ad-hoc group recognizes this could have the unintended result of creating a backlog but believes the potential backlog is reduced through other aspects of the proposal. 
      • The benefits outweigh the potential drawbacks, and SPP has instituted a similar requirement that also applies to beginning Phase II of a subsequent study prior to the previous study completing Phase II. This helps avoid re-study.
      • This would have the benefit of increased confidence in study results due to less prior queued generation being included in study models without associated NUs and reduced risk of withdrawals of projects in prior queues, increasing certainty and visibility on the prior-queue NUs and issues, and more overall information to support IC’s financial commitments.
      • Failure to sequence appropriately exacerbates the physical demand problem seen in DPP21 and 22.
        • Other suggested improvements to information access, flow, and timing
    • Post an FAQ detailing available information and where to find it. 
    • Make pre-screening results easier to understand to allow ICs to make informed decisions.
    • Allow more time between pre-screening results and the start of the cluster study to allow ICs more time to conduct due diligence on the screening results.

Again, thank you for the opportunity to provide these comments and recommendations, and we look forward to continued collaboration among MISO and stakeholders as we develop effect queue reform.  Please feel free to contact Ginger Hodge (Customized Energy Solutions - ghodge@ces-ltd.com or 317-910-5260) with any questions or to arrange a broader discussion with the ad-hoc group.  

Ad-hoc Group Participants Signing onto Feedback

CMPAS

EDF Renewables

Entergy

Candela

MPPA

Wolverine

 1.     Introduction

Clearway[1] appreciates the opportunity to provide feedback in response to MISO’s proposed interconnection queue reforms. The fleet and technology evolution underway presents unprecedented challenges to integrating new resources quickly, reliably, and cost-effectively. With MISO at the vanguard of regions managing these challenges, the stakes are high. Yet, Clearway is concerned that MISO is missing a key opportunity to consider more comprehensive reforms that will pay long-term dividends.

Clearway views the root cause of MISO’s queue problems not as the volume of projects entering the queue but rather (a) inadequate integration with transmission planning and (b) the limited throughput of current interconnection processes, which are not built for the scale of commercial interest today (section 2). Moreover, many options on the table are unlikely to yield the results MISO seeks, while unduly shifting additional risks to interconnection customers (ICs) (section 3). Durable queue reform instead requires a longer view and more holistic solutions, including lifting the hood on study methodologies and tighter linking with transmission planning (section 4). If MISO continues on its current path, however, it should make critical adjustments, including limiting these reforms to the DPP cycles closing in 2023 and 2024, while undertaking a stakeholder process exploring more holistic approaches to queue reform (section 5).

Clearway also generally supports the comments filed by Clean Grid Alliance (CGA).

2.     Reframing the issue: The root causes of MISO’s queue problems are (a) the lack of integration with the transmission planning process and (b) the limited throughput of current interconnection planning processes, which are not built for the scale of commercial interest in today’s market

Clearway remains very concerned that the speed at which MISO is pursuing queue reforms is causing MISO to miss a key opportunity to consider more comprehensive and durable improvements to the interconnection process while also providing better integration with the transmission planning process. We appreciate the challenge that MISO is facing: an unprecedented volume of interconnection requests is causing MISO’s existing queue processes to be dysfunctional. But this volume is merely a demonstration of strong commercial interest, driven by enhancements to the transmission planning process, and a sign of a healthy and competitive market for new generation in the MISO footprint.

The problem plaguing MISO’s queue is not the volume of interconnection requests, but the current processes for evaluating these interconnection requests, which are not built for the scale of commercial interest in today’s market. Current study processes take far too long and are too resource-intensive to keep pace with this commercial interest, the end result of which is study scenarios that are not realistic and fail to capture the benefits of the Long-Range Transmission Planning process.

3.     Many of the options on the table are unlikely to yield the results MISO seeks, while unduly shifting additional risks and costs to ICs

In announcing this latest round of queue reforms, MISO has expressed to stakeholders that its primary concern is that its Phase 1 study scenarios are unrealistic, and that for study models to solve, MISO must limit the number of projects entering a given DPP cycle. To that end, MISO’s proposal focuses on raising barriers to entering the queue and increasing developer risk once in the queue, with the expectation that this will reduce the volume of projects seeking interconnection to a more “sustainable” level based on how MISO’s interconnection process is designed.

Clearway agrees there may be a tendency for some developers seeking to block competition to flood the queue with speculative and redundant requests. Reasonable increases to developer risk, such as through increased later-stage deposits and site control demonstrations (discussed below), can help moderate this behavior but will not fully address MISO’s concerns. This is because under current interconnection practices, the only way to determine interconnection costs and available transmission capacity—and, in turn, assess the commercial viability of a project—is to enter the queue. Therefore, placing restrictions on how many projects can enter a given DPP cycle does not change the reality that many developers are entering more projects in the queue than will ultimately get built, simply to obtain information that informs investment decisions. In other words, submitting a high volume of projects is a feature of the first phase of the interconnection process, not a bug.

Moreover, as CGA notes in its comments, this is not the first time that MISO has undertaken similar reforms. Time and again, MISO has asked ICs to accept additional risks and costs with the promise that, in exchange, each set of reforms would ensure that MISO can deliver timely and accurate study results. In this regard, this proposal is no different than prior reforms. Yet, at the August 7^th workshop, MISO staff conceded that the proposed reforms collectively may still fail to enable MISO to meet its tariff-prescribed study timelines. Given this admission, before asking ICs to accept even more risk, MISO must at a minimum explain to stakeholders its intent to comply with the penalty provisions contemplated in Order No. 2023 for delayed study results. Only then will MISO’s request that ICs bear more risk be more balanced with some degree of accountability for timely and accurate study results.

4.     Durable queue reform requires a longer view and more holistic solutions, including lifting the hood on study methodologies and creating a tighter linkage with the transmission planning process

A significant contributing factor to the volume of projects “breaking” the queue is MISO’s practice of studying all projects entering the queue as if they are seeking deliverability (via Network Resource Interconnection Service, NRIS). This practice causes studies to take too long and produce unrealistic results. There are more projects entering the queue than needed to serve the peak load in the MISO region, so MISO is studying deliverability scenarios that will never happen.

This is not a good use of time and precious resources, and it is creating the very problem MISO identified when initiating this queue reform effort: an inability for MISO’s study models to solve. By instead focusing on an ‘as-available’ Energy Resource Interconnection Service (ERIS) study framework for all resources first, MISO could achieve faster and more accurate study results for the large volume of projects entering the queue.

All projects need ERIS, but not all will need NRIS. Some customers (like corporate buyers) are most interested in buying RECs, while their capacity needs are met elsewhere. So, after receiving ERIS study results and interconnection costs, ICs can start to identify customers that need fully deliverable projects. Once those commercial arrangements are made, a much smaller pool of projects will then seek full deliverability (through additional NRIS studies). Meanwhile, for ERIS-only projects, ICs can proceed through the queue based on their ERIS-only study results.

In parallel, MISO’s transmission planning process is already proactively building transmission needed to support full deliverability for the subset of new projects that need it. To access that higher level of NRIS interconnection service, project owners must simply demonstrate they meet more stringent criteria (e.g., a commercial arrangement with a load-serving entity). Projects meeting such criteria would be allocated that higher level of interconnection service on a first-ready, first-served basis—and only in exchange for ICs contributing to the cost of these more optimally planned upgrades.

Together with enhancements to the resources available to MISO and transmission owners (TOs) to perform studies efficiently—such as increased staffing (internal or consultants) and deployment of study automation tools—this type of integrated framework would at last address the root causes of MISO’s queue problems.

5.     If MISO continues on its current path, it should make critical adjustments, including time-limiting these reforms while undertaking a comprehensive stakeholder process exploring more holistic approaches to queue reform

To-date, MISO has expressed to stakeholders that it must file reforms with FERC this Fall, which leaves no time for considering more fundamental and comprehensive queue reforms. As discussed above, Clearway believes that to finally address the root causes of problems plaguing MISO’s queue, MISO should instead be willing to explore more holistic solutions, like lifting the hood on its study methodologies and more tightly linking the interconnection process with the transmission planning process.

Should MISO insist on proceeding with its current proposed reforms, however, Clearway offers the following comments:[2]

5.1.   Time-limit the Reforms

• First and foremost, MISO’s proposal should be time-limited to only apply for the DPP cycles closing in 2023 and 2024, with the rules reverting to the current rules in 2025 absent further tariff revisions.
• In parallel, MISO should commit to introducing an issue in the stakeholder process that would trigger a more comprehensive look at options for queue reform, including a tighter integration with the transmission planning process and regional integrated resource plans, with meaningful opportunities for robust stakeholder input. Such a stakeholder process should evaluate reform options against whether they: (1) preserve open access to the transmission system, (2) ensure non-discriminatory treatment of all ICs, (3) result in an interconnection process that aligns with project development cycles, and (4) safeguard system reliability.   
• Time-limiting these reforms will also allow MISO and stakeholders to engage in meaningful discussions regarding MISO’s compliance filing for Order No. 2023, rather than prejudging certain compliance matters through the instant reform efforts.

5.2.   Site Control Demonstrations for Gen-Tie & Point of Interconnection (POI)

• MISO’s proposal to require 50% site control for gen-tie at the time of application is unduly burdensome and, in some cases, infeasible, for the following reasons:
  • As CGA’s comments note, MISO states have differing permitting requirements. In some cases, ICs must have a queue position prior to requesting easements for the gen-tie facilities, thus rendering MISO’s proposal infeasible.
  • Given the remoteness of renewables-rich areas within the MISO footprint and the long lead times to build regional transmission, it will become increasingly common for new projects to site longer gen-tie lines to reach available transmission capacity. Requiring 50% gen-tie site control without a DPP study result to inform project viability is like requiring TOs to route and secure 50% site control for regional transmission lines without going through a MTEP planning study. The sequence is unreasonable.
• If MISO is inclined to require gen-tie site control demonstrations, such requirements would be more appropriate at later stages of the DPP cycle, once Phase 2 results can provide ICs with more certain interconnection cost information and can make an informed investment decision. For example, it would be more reasonable to require 50% gen-tie site control at the same time the M4 payment is due (i.e., at Decision Point 2), and a demonstration of 75% gen-tie site control prior to LGIA execution.
• MISO should abandon its proposal to require a POI site control demonstration altogether, as it imposes an undue risk on ICs. The POI can change for reasons outside the IC’s control until very late in the DPP cycle, in large part because TOs must provide detailed information related to the POI, which requires substantial time and resources on the TO’s part. Clearway is unaware of any region that requires a demonstration of POI site control, and for good reason.

5.3.   Increased Milestone Payments

• Clearway opposes MISO’s proposal to increase the M2 deposit. Retaining the M2 amount at $4,000/MW strikes an appropriate balance between risks borne by the IC and, as described above, the inherent need for an IC to enter the queue to obtain information about interconnection costs and available transmission capacity.
• Clearway opposes MISO’s proposal to (1) impose a minimum incremental deposit for M3 and M4, and (2) make the M3 and M4 payments additive rather than cumulative. The purpose of tying the M3 and M4 amounts to the value of network upgrade costs is to calibrate an IC’s risk exposure as an increasing function of the ultimate interconnection costs their project will bear. MISO’s proposal instead ensures that an IC will always be required to pay more to proceed through the queue, irrespective of whether milestone payments to-date have already met the applicable percentage of network upgrade costs. In doing so, the proposal is unduly discriminatory as ICs who would be required to post a minimum incremental deposit must effectively bear more risk (as a percentage of network upgrade costs) than similarly situated ICs. Additionally, MISO has not adequately explained why making the M3 and M4 deposits additive instead of cumulative is necessary in addition to increasing these values as a percentage of network upgrade costs to deter what MISO views as inefficient “speculative” behavior.
• However, if MISO proceeds with increased M3 and M4 payments, Clearway would find acceptable increasing the M3 payment from the current 10% of network upgrades to 15% of network upgrades (less the M2 payment), and increasing the M4 payment to equal 30% of network upgrades (less the M3 and M2 payments). To be clear, increasing the M3 and M4 deposits must be in tandem with reverting to the current practice of these amounts being cumulative.

5.4.   Automatic Withdrawal Penalties

• MISO should abandon its proposed automatic withdrawal penalty of 10% of M2 that would apply upon queue entry. As discussed above, developers can only obtain meaningful information by entering the queue and proceeding, at minimum, through the scoping & screening study process. A 10% automatic withdrawal penalty would be unduly punitive given the limited information available to ICs at the time they assume this risk. If MISO’s concern is covering the time and resources spent during this initial screening phase, MISO could instead consider increasing the DPP Study Funding Deposit (D2) reasonably to cover the study cost and scoping cost. The latter would be appropriate because initial discussions in the scoping process are less dependent on MW project size (upon which M2 is based).
• MISO should also abandon the proposed automatic withdrawal penalties for subsequent study phases, as it is unduly punitive, if not unjust and unreasonable, to assess a minimum penalty on ICs that bears no relationship to the harms caused to other projects in the DPP cycle or later cycles.
• Clearway instead proposes making the penalty for withdrawing in Phase 2 a function of M3 and, thus, network upgrade costs (as opposed to a function of MW project size, as is the case currently). A meaningful percentage of that M3 amount should be at-risk upon entering posting the M3 payment, which Clearway believes will disincentivize ICs from “hoarding” capacity while incentivizing ICs to site the projects where transmission capacity is available.
• In addition to performing a harm calculation prior to assessing any withdrawal penalty, MISO should publicly post its methodology for performing such harm calculations (with example calculations) to increase transparency for ICs as to how harms are determined and how the proceeds of a penalty will be disbursed. Penalty proceeds should first cover any costs of re-studies triggered by the IC’s withdrawal, and then cover the costs of network upgrades that other ICs must bear due to the withdrawn project.

5.5.   Eligibility for Penalty-free Withdrawal

• MISO must abandon its proposal to modify the eligibility criteria for penalty-free withdrawal. As CGA notes in its comments, the current penalty-free withdrawal rules are a vital measure for ICs to effectively manage their risk exposure to unforeseen cost increases that could otherwise ruin a project’s economics.
• The current availability of penalty-free withdrawal, in effect, is the only balance that allows ICs to accept existing risk levels in the MISO queue. It is thus untenable to undermine the availability of penalty-free withdrawal while simultaneously asking ICs to bear even greater risks and costs through the other proposed reforms. In effect, MISO’s proposal would penalize ICs for making rational business decisions to withdraw when the goalposts have moved significantly compared to prior cost estimates.
• Additionally, it is fundamentally unfair to limit eligibility for penalty-free withdrawal to only the “outliers.” Other projects within the DPP cycle may face similarly dramatic, unforeseen cost increases, albeit relatively smaller compared to these “outliers.” MISO has not articulated a justification for making this distinction.

5.6.   MW Cap

• MISO should abandon its entire MW cap proposal. MISO staff admitted to stakeholders at the August 7^th workshop that even with a MW cap, which MISO has described as a “backstop” measure to ensure it can effectively process a DPP study, MISO may be unable to meet its prescribed study timelines. Given this admission, it is unclear what problem the MW cap is addressing.
• Moreover, as stakeholders have resoundingly demonstrated in comments to-date, limiting entry to a DPP cycle based on the kind of MW cap currently contemplated by MISO creates a significant new problem with respect to selection methodology for which projects make it under the cap. Imposing an arbitrary barrier to interconnecting while allowing projects with a PPA to bypass the cap may violate open access principles. In addition, a timestamp-based selection process does nothing to select for high quality, commercially viable projects; it would instead arbitrarily delay projects that may in fact be the best positioned to support grid needs.
• MISO should not underestimate the legal risks of filing with FERC a MW cap proposal that is substantially like what it has presented to stakeholders to-date. As highlighted by CGA and other stakeholders—both in written comments and during the August 7^th workshop—there are serious concerns regarding the administrative viability and legality of the MW cap and related restrictions (e.g., limitations on selling projects). MISO must fully consider and address how its proposal comports with open access principles or risk an adverse decision by FERC or on appeal. Such an adverse outcome would further delay MISO’s ability to close the next DPP cycle while potentially losing precious time that could have been dedicated to exploring broader reform options.

Cordelio Power Comments on MISO Queue Reform August 9^th, 2023

Cordelio Power appreciates the efforts MISO is making to further improve the interconnection queue process. As the need for renewable energy increases, queue sizes will continue to increase across the country. Therefore, we encourage MISO to take a holistic approach to improving queue processing by engaging all stakeholders and implement changes that go beyond just interconnecting customers.

•  ROW site control, requiring POI site control prior to a scoping call or input from the Transmission Owner, will only result in increased cost and risk to developers. We believe a 50% of gen tie ROW demonstration at DP2 is more practical, along with 100% demonstration of gen tie ROW & switchyard at LGIA execution.
• Queue cap – we respectfully disagree with a predetermined queue cap. Focus should be on crafting reforms that will limit queue entry to only "serious" projects. If the queue cap is exceeded then there has been a failure of that goal, and queue capping introduces other undesirable effects.
• Milestone Payments, we believe $10k/MW for M2 is a reasonable increase. Secondly, we agree with the M3 and M4 proposals.

Cordelio Power appreciates the fact that MISO takes the initiative to continuously improve the interconnection process and kind request that MISO consider our suggestions above.

 Respectfully,

Clayton W. Robinson

VP, Transmission & Grid Integration

 Transmission Owner Feedback on Generator Interconnection Queue Reform

MISO’s July 19, 2023 Queue Reform Improvements Proposal referenced herein is posted at: https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf

The CRA report referenced in MISO’s July 19^th PAC meeting presentation is posted at: https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20Charles%20River%20Associates%20Queue%20Reform%20Report629633.pdf

August 9, 2023

In the July 19 meeting of the Planning Advisory Committee (PAC), MISO presented a package of queue reforms needed to improve the rules governing entry and exit from the Generator Interconnection Queue.  Stakeholders were asked to provide feedback on the proposal.

The Owners thank MISO for the opportunity to provide input into this very important effort to swiftly implement an effective set of reforms to address increasing demand for interconnection of new generating resources at a reasonable cost, and we recognize the urgency of this task. 

In the comments below, the Transmission Owners (Owners or TOs) suggest general improvements intended to facilitate the development of a package of Generator Interconnection Process (GIP) reforms that include entry rules and readiness requirements geared towards getting ready and needed generators projects in and through the queue. 

Our feedback on MISO’s Proposed Queue Reform Package includes input on how reforms can be most effectively and efficiently implemented, and suggests some modifications to the changes MISO proposed at the PAC.  Finally, the Owners reiterate the need for the reforms to be supported by relevant data, and the data that we see as relevant to this analysis concludes these comments.

Recommended Improvements to Existing Processes and Tools

Beyond the areas of reform MISO proposed at the July 19, 2023, PAC meeting, the general improvements recommended by the Owners in the comments below are targeted towards increasing the overall efficiency of the Generator Interconnection Process (GIP) by eliminating the use of the queue to get information relating to project viability that could be determined through the pre-queue due diligence enhancements such as:

• implementing targeted enhancements to facilitate increased accessibility and use of information and tools already available on MISO’s website, such as the POI tool and the Interactive Queue Map, like
  • automating information exchanges between ICs and TOs through the portal to ensure information communicated has been received, acknowledged, and made available to others to improve transparency and access to information.
• developing pre-queue entry requirements to improve IC due diligence, supported by suggested enhancements to accessibility of relevant information, and
• requiring IC acknowledgment of identified potential POI issues and likely NUs at the POI outlet (e.g. identified through pre-queue due diligence at each stage of the study process, based on available information with improved pre-queue visibility or identified as the study progresses.

To limit the entry of “speculative” projects into the queue, the Owners specifically, recommend the inclusion of the following process improvements in the Queue Reform package to be implemented for the next DPP cycle:

1)     Implement targeted enhancements to the accessibility of information already available in tools such as the POI tool and the Interactive Queue Map.  For example:

• Use the GI Queue Portal to automate the pre-queue information exchange associated with the “Generator Interconnection Ad Hoc Information Session Request Form”[1] provided for IC to discuss potential POI and Interconnection Project issues with the TO, and improve the utility of this exchange by considering whether any of the information currently exchanged via the “Scoping Discussion Questionnaire” and during Scoping Calls, which occurs after the study kicks off, could be populated into the Information Request Form and exchanged in advance of project submission through the Portal. 
  • For reference, the content of Scoping Discussion Questionnaire is included at the end of these comments, along with existing requirements of BPM-015, Section 5.1.2. “Site Control Requirements Review Detail,” also referenced later in these comments.
  • Tie the submission of and responses to the enhanced “Generator Interconnection Ad Hoc Information Session Request Form” to the POI Analysis Tool.
  • Enable interaction between the POI Analysis Tool and the Interactive Queue Map, which is updated every 30 minutes. 
  • If the information the Owners have suggested MISO make available to Interconnection Customers is already available on MISO’s website, consider whether enhancements may be made to improve awareness, accessibility, functionality, and information that can be easily linked to existing tools, like:
    • active links to prior System Impact or Facilities Studies Reports,
    • key findings from prior System Impact or Facilities Study Reports or other sources that would be relevant to future interconnection requests at that POI, and not already available through the existing tools,
    • Tie overloads identified through POI tool analysis to the Transmission Cost Estimation Guide to provide an indication of Network Upgrade costs.
    • Consider tagging stability and voltage NU issues and costs from prior studies in the POI tool.
    • Consider asking ICs for additional suggestions regarding other improvements to the tools and information that would be helpful to their analysis of project viability.  

2)     Require pre-queue entry training or other demonstration of pre-queue due diligence in advance of each study cycle to ensure IC familiarity with and use of the information and tools available to support enhanced pre-queue entry requirements.

3)     Increase queue entry readiness requirements and modify timing adjustments to allow validation by MISO as Applications are entered into the portal.

• Require documentation of Generator Site Control at the time of Application submission, rather than tying this requirement to study kick off.
  • PJM requires 100% site control for generating site at the Application Review Phase but does not require any POI-related Site Control until DP1, and SPP does not require it until DP2.
  • Require demonstration of a viable pathway from the generator to the requested POI at project submission, along with a description and documentation of any Regulatory limitations to obtaining POI site control and associated ROW at or prior to GIA execution in “ROW viability documentation” submitted with the Application.
  • Site plan and demonstration of POI and Interconnection Facility ROW viability should be validated by MISO as Applications are submitted to allow ICs to cure minor deficiencies in the Application, or for MISO to reject the Application for major deficiencies
    • M1 Milestones (D1 and D2) should be used to fund this work by MISO to confirm the IC performed the necessary pre-queue due diligence to evaluate POI viability and the feasibility of procuring rights to the necessary ROW for the Interconnection Facilities that will be required to interconnect the Generator at the requested POI.
    • As noted by MISO in the July PAC presentation, SPP and PJM require the One-Line diagrams submitted with the project application to be certified by a PE.  (See MISO slide 20)
    • For the reasons explained below in the Owners responses to MISO’s proposed reform package,
      • the Owners do not support requiring the IC to demonstrate ROW Site Control from the Generator to the requested POI until the ICIF FS and DPP Phase 2 Studies have been completed (i.e., tied to Decision Point 2, after ICIF FS and short circuit, voltage and stability studies), physical Site Control requirements should apply at DP2.

4)     Enhance the exchange of information provided in the Scoping Discussion Questionnaire

• Automatically route the TO’s input on the Scoping Discussion Questionnaire (Scoping Questionnaire) through the GIP Portal as suggested above.
  • Require ICs to acknowledge receipt of the TO’s responses to the Scoping Questionnaire through a formalized process completed, in advance of or potentially instead, of a Scoping Call if neither the TO nor the IC requests a Call to discuss the IC questions with Owners.
  • For TOs, and likely other stakeholders as well, a “download all” option would be a big improvement to this information exchange process.
  • Regarding opportunities for enhancing data exchanged prior to queue entry and after entry via the Scoping Questionnaire by incorporating the improvements to the Generator Interconnection Ad Hoc Information Session Request Form”, which is essentially blank, and automating the information exchange process, considerthe Owners’ suggestion above to tie the information requests and responses to existing online GI-related data information exchange platforms and include more automated fields that can be inked to the POI Analysis Tool and Interactive Queue Map to allow improved access to information, transparency, and efficiency, and enabling increased pre-queue due diligence and queue entry requirements.
    • Consider whether any of the following items, listed in BPM-015 Section 4.1, describing “Topics for discussion during the Scoping Meeting” could be added to the“Generator Interconnection Ad Hoc Information Session Request Form” and used to populate the available online tools, as suggested abovethat may include, but may not be limited to:

i. Consider a reasonable number of alternative interconnection options to determine potential feasible POIs.

ii. General Facility loadings

iii. General stability and short circuit issues in the area

iv. General voltage issues including the ride through capabilities of the Generating Facility

v. General power quality issues including voltage flicker and harmonics.

vi. General local and regional reliability issues

vii. Diagrams and/or layout of applicable substations and transmission lines

• The BPM provides that the IC may choose to modify its POI based on information obtained in the Scoping Meeting, so increasing access to this information prior to queue entry would improve the quality of projects entering the queue and permit increased entry requirements supported by IC pre-queue due diligence.

5)     To avoid excess generation in DPP study models exacerbated by the inclusion of prior queued generation without executed GIAs in subsequent study models, adoptSPP’s approach to sequencing study cycles to require that Phase I of the current cycle must be complete before the subsequent Phase I can begin, which SPP also applies to Phase II studies.   

• Including this same restriction in MISO would provide more realistic study results if the model for the subsequent Phase I reflects the withdrawn projects from the previous Phase I study.

Owners Feedback on MISO’s Proposed Queue Reform Package

MISO’s proposed Queue Reform Package focuses primarily on increasing entry costs and the risk associated with investing in GIP participation, but in the quest to ensure more reasonable study cycle sizes going forward, we encourage MISO to be mindful that increases in project costs will ultimately be borne by consumers.  Proposed cost increases must be supported by a reasonable expectation that they will result in a more efficient GIP that gets ready projects in and through the queue, and the increased participation provide a net benefit to consumers and are thus just and reasonable. 

The more detailed responses to MISO’s Queue Reform Proposal below elaborate on the need for MISO to consider how the process improvements and enhanced entry requirements recommended above, which are targeted primarily to addressing concerns relating to demonstrating project readiness and reducing the number of speculative projects entering the queue support achievement of our shared objective of getting good projects in and through the queue, and suggest that by implementing these reforms, these objectives may be achieved without relying on  proposed increases to participation costs and risk, that may potentially increase the cost of energy to the consumer and suggest modifications to the proposed reforms intended to reflect project readiness, rather than the willingness of an IC to put money at risk.

MISO’s Proposed Reform adjusts the following items:

Increase M2 from $4k/MW to $12K/MW with corresponding adjustments to M3, and M4 milestone payments

MISO has stated that the driver for the proposed increases to M2 payments is to reduce the number of speculative projects entering the queue, which the other enhanced entry requirements recommended by the Owners in these comments are targeted to address.  In particular, we highlight those relating to POI pre-queue due diligence and associated entry requirements. 

The proposed M2 increases will have a considerable impact on Load Serving Entities that require larger generating units to serve baseload energy needs and meet Resource Adequacy requirements through dispatchable generation that tends to range from 400-1200MW, based on existing technology and the MW size of projects currently in DPP. 

The Owners request that MISO consider the following, and further evaluate the proposed increase to M2 payments:

As MISO has stated, increasing M2 entry payments is not certain to result in a reduction in MW seeking to enter the queue, and therefore the proposed Queue Reform package also includes limiting the amount of new generation included in each study and increasing Site Control requirements relating to the POI to increase the need for Interconnection Customer due diligence prior to queue entry. 

• These other reforms are more targeted approaches to eliminating “speculative” and resulting in a GIP that gets ready projects in and through the queue.  Projects that can meet the enhanced queue entry requirements described herein, validated by MISO prior to study kick off, would limit the need to increase Milestone payments.
• Both MISO and SPP have recently reported positive results in working through their queue backlogs, and their entry costs, just approved by FERC, are equal to MISO’s current M2.   Given FERC has just found $4K/MW to be reasonable, MISO will need to present significant justification for increasing M2 to $12k/MW.
  • Increased cost to project development resulting from increasing the carrying cost of capital for the length of the study and the risk associated with proposed increases to Automatic Withdrawal Penalties if a project is found through the study process to be unviable would ultimately be passed on to the consumer; thus, MISO would need to demonstrate the increase in GIP participation costs is sufficiently certain to reduce the number of “unready” projects entering the queue to result in a “reasonable” number of projects in a study, thus justifying the increased cost of participating in the GIP, despite the possibility the other proposed reform options would have a more certain impact on both the readiness of projects entering the queue and the amount of MW included in a DPP Study.
  • The disproportionate impact of MISO’s proposal to significantly increase M2 payments potentially increase the risk of loss of that investment if the project is not viable based on study results, on large interconnection projects, (i.e. 500+ MW), should be considered by MISO in this element of MISO’s Queue Reform package.
  • Increasing M2 payments is also counter to the overall objective of getting generation operating at the least cost possible to energy consumers.  The Owners suggest that adjustments to M3, and M4 milestone payments coupled with the enhanced queue entry requirements suggested above, would incentivize withdrawals after DPP Phase 1, when study results are available to inform these decisions and better reflect the potential for harm to other customers due to uncertainty resulting from withdrawals as the study advances, assuming the queue size issue is also addressed.  For the same reasons, the application of automatic penalties should be considered in those later phases.

Together, CRA and MISO analysis appear to indicate that $100k/MW in NU costs at Phase 3 is (1) the implied upper limit for ICs to move forward to GIAs and (2) the upper bound of anticipated costs of Network Upgrades at DPP Phase 3 to date.  Both also indicate a sharp and continuing increase in NU costs after 2018 that likely corresponds to the increase in the number of projects and MW seeking to interconnect that began in 2019 and continued to increase in the 2021 and 2022 study cycles.

See CRA Report, slide 15 https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20Charles%20River%20Associates%20Queue%20Reform%20Report629633.pdf

and see MISO’s July 19 PAC presentation, slide 25

https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf.

The CRA Report presents what M2 deposits would be for prior queues if they were based on a percentage “anticipated NU Costs in Phase 3” that were “more representative of the final NU payment cost and significant enough to discourage speculative behavior” beginning at 15% and increasing from there.  MISO’s proposal to increase entry milestone to $12k/MW roughly corresponds to CRA’s calculation of 25% of the median costs of NUs in study cycles between 2017 and 2020, and in the middle of the range suggested in the CRA Report.

Regarding the relative increase from today’s $4K/MW, which MISO noted as clearly not a deterrent to projects entering the queue, FERC Recently approved SPP and PJM filings, indicative of FERC finding their entry milestones, which are equivalent to MISO’s current M2, to be just and reasonable:

• SPP[2]

In Docket No. ER22-253-000, FERC approved SPP’s proposed increase to FS1 and FS2 deposits from a minimum of $2k/MW to $4k/MW each. 

FS1 (equivalent to MISO’s M2):  $4,000/MW (= MISO’s current M2), increased from $2k/MW

FS2 Development Milestone (due at Decision Point 2, equivalent to MISO’s M3, due to enter DPP Phase 2), requires at least one from the list of options:

1. Power Purchase Agreement

2. Long-term Transmission Service Reservation,

3. Authorization to construct from a Government or Regulatory agency,

4. Financing commitment evidence,

5. Additional Security Deposit of $4,000/MW

Note – The FS2, referenced by MISO as a “Development Milestone” is not an “entry” payment; rather FS2 is required to proceed to DPP Phase2, more analogous to MISO’s M3 than to M2[3]. 

• PJM, in Docket ER22-2110, FERC approved:[4]

D1 Non-Refundable Fee:  10% of study deposit nonrefundable

D2 Study Deposits:

0-20MW: $75k

>20-50MW: $200k

>50-100MW: $250k

>100-250MW: $300k

>250-750MW: $350k

>750MW: $400k

(M2/RD1) Readiness Deposits:

Due at the end of Phase 1 (Decision Pt 1)

100% at risk after DP 2

$4000/MW.

Improve site control requirements for the Point of Interconnection (POI)

MISO Proposes:

• 50% site control from generator site to POI upon application, or $80,000/mile for the entire line mileage to POI

• 50% site control from generator site to POI and 50% of IC switchyard, if necessary, prior to Phase 2

• 100% site control from generator to POI, including IC switchyard if necessary, prior to GIA Negotiations

As noted in the Recommended improvements above, the Owners support increasing POI due diligence and Site Control requirements for both the generator and from the generator to the POI but have concerns about the timing of MISO’s proposed POI-related Site Control requirements.  Due to the inability to fully assess the viability of a POI without completion of the IC Interconnection Facilities FS and the studies performed in DPP Phase 2 (stability, voltage, and short circuit), the TOs recommend:

1. that Site Control requirements from the Generator to the requested POI should not apply until DP2, but as suggested above,
2. that a viable ROW and any limitations on procuring the ROW needed for the ICIF at or prior to GIA be required in the Application, and
3. that Site Control and POI viability are validated by MISO once the Application has been received. 

As suggested above, the Owners recommend MISO focus on revisions to queue entry requirements that focus on:

1. Generator site control and move the IC requirement to submit a site plan map described in BPM-015, Section 5.1.2.
2. the ICs pre-queue due diligence in evaluating the viability of

i)       the selected POI and

ii)      the pathway from the generator to the selected POI and

1. an understanding of the potential scope of upgrades at a POI.

Regarding POI viability information availability and Timing considerations for POI-related Site Control

Capacity availability can be assessed in the POI Analysis Tool, but the Feasibility Study may result in moving the POI along an existing transmission line, and project withdrawals can also significantly impact results.

• Pre-queue
  • The Owners recommend the ICs review the Information in the POI Analysis Tool and the Interactive Queue Map, that MISO include a requirement for the IC to submit a Generator Interconnection Ad Hoc Information Session Request Form for any POI that does not already have relevant information available in the POI tool and affirm that available prior studies were reviewed prior to Application submission.
    • If no information on an existing POI is available when the IC is evaluating a potential interconnection project, as suggested above, the routing of the Generator Interconnection Ad Hoc Information Session Request Form can be improved through automation, and results can be posted on the POI analysis tool or Interactive Queue Map to identify any unique situations at that POI that would impact the viability of the POI relative to new generator interconnection projects such as:
    • The POI is in an industrial facility (no path to entry);
    • At POIs shared with nuclear facilities, there are often concerns relating to construction feasibility and difficulties scheduling outages at the POI where those facilities are interconnected
    • The need and ability to expand the POI if it is an existing substation.
    • If the IC is requesting a Greenfield POI, a different set of requirements need to apply to ICIF ROW Site Control requirements, as the exact location of interconnecting to existing transmission facilities may be complicated by many factors, which include:
      • If the TO requires radial stations requiring a POI buildout at the tap point where the radial connects (2 stations required), where interconnecting to a main line would be far less expensive.   There may be instances where it may be two IC’s may want to share the cost of a new greenfield POI.  This will also avoid the segmenting of a line several times.
      • If the IC is willing to execute an Engineering and Procurement Agreement, there is an opportunity to better identify a suitable POI in advance. 
      • Consider allowing for exceptions to POI-related Site Control requirements to allow for the TO to determine the POI site location once the appropriate agreement is entered into with the Interconnection Customer. 
      • In DPP
        • Voltage, stability, and short circuit analysis results may have a significant impact on the cost of interconnecting at a requested POI, and this would not be known until DPP, though it could be indicated in prior studies
        • Withdrawal of other projects in later phases may create new stability & voltage & short circuit issues at the POI.

Introduce an escalating automatic penalty upon withdrawal and adjustment to meaning of harm.

If an penalty for project withdrawal is to be applied it should demonstrate that other projects in that study or prior queued studies were adversely impacted by the withdrawal, and while this can happen in the case of some NUs that are allocated to multiple customers, the CRA Report referenced by MISO seems to indicate NU costs tend to go down significantly as the study progresses through cycles, presumably because as interconnection projects between Decision Points decrease, the number of NUs needed is reduced, lowering the cost of NUs significantly between DP1 and DP3.  Therefore, it is not appropriate to assume that other ICs are harmed by the withdrawal of a project, as implied by the proposal to apply automatic penalties to withdrawn projects.

Adjust penalty free withdrawal provisions to simplify calculation and reduce availability.

Any adjustments to penalty free withdrawal provisions should be based on (1) the harm of the withdrawal to other projects in that queue or prior studies (2) avoid penalizing ICs for withdrawing due to study results that they could not have known without entering the study, and (3) incentivize early withdrawals based on study results.

• While a project’s inability to meet the enhanced entry requirements suggested above may qualify a project submission as “speculative,” there is some information that can’t be determined prior to the completion of the analysis that is performed by MISO as the study progresses, including the information provided in Screening Studies and during Scoping, and can’t be determined by the IC or the TO prior to entering the queue, but may drive Network Upgrades or other costs that make a project infeasible.
• Consistent with reforms proposed to increase pre-queue due diligence and queue entry requirements, M2 milestones should only be forfeited if the customer withdraws for reasons that should have been identified by the IC before queue entry through pre-queue due diligence (confirmed by the IC at entry – e.g., potential upgrades seen in the tool and any limiting factors identified by the TO or MISO in prior studies at that POI.

Limit the number of MW that will be allowed in future cycles.

While project constraints are identified by MISO in pre-screening today, because of the size of the queue, the results are not seen as valid or realistic results to inform for ICs decisions in continuing to Phase I of a DPP study.  Limiting queue size would increase the value of these studies upfront and would support more informed IC decision making at each phase of the DPP.

Limiting study size is the most impactful element of MISO’s proposal; and limiting future study sizes to “reasonable” amounts of new and prior queued generation included in a study is necessary to ensure reasonable outcomes, but to be equitably implemented, the reform package must also:

• include entry requirements, such as those noted in the TO Recommendations above, that would ensure projects entering the queue have completed their pre-queue due diligence regarding their requested POI, and NUs likely to be identified in the DPP study have been recognized by the IC,  
• allow exceptions for projects increasing reliability (like batteries near load centers), and
• allow exceptions for projects with load commitments or generation needed for an LSE to meet its load serving obligations to proceed in that study, potentially demonstrated by, for example, a NITS Designation on OASIS or relevant SPP Development Milestones cited on slide 20 of MISO’s July 19 PAC presentation (referenced above in the Owners comments on the Milestone Payment increases), or other demonstrations of such commitments.

Instituting a cap to each study, where entry requirements are validated as projects are entered would reward ready projects by ensuring that they are included in the soonest possible cycle, and also ensure that the projects studied are not, “speculative”.   

Regarding how the MW Study Cap should be set, and MISO’s initial proposal to base this cap on 60% of peak load applied by Load Ratio Share to each DPP study region. 

At the August 7, 2023 Queue Reform Workshop, MISO noted, and the Owners agree, that the DPP Study Area caps will   be set based on technical considerations specific to each DPP study area.  The relevant technical considerations relating to resource location and type, transmission system capacity and limits, and area resource attributes, will evolve over time as new generation is interconnected and transmission system upgrades are constructed.  While it is appropriate to target a percentage of MISO load as a cap, the amount of MW studied in each cycle should be established by study area and determined in coordination with the Transmission Owners in each DPP Study Area and based on the factors the Owners have outlined below and any other relevant considerations that may be identified.

In addition to the considerations of each DPP Study area, there are differences between the MISO Sub-regions must be considered in setting appropriate DPP Study Area caps which will influence the amount of new generation that can be accommodated in a single study beyond the proposed percentage of new generation to existing load that can be accommodated.  For example, whereas MISO North has four DPP Study Areas to manage the dispatch of new generation in DPP studies, for MISO South, which is just one DPP study area, the major limitation is the study models are not able to be dispatched against each other, so the only units able to be dispatched down to accommodate the new generation is the existing generation and prior-queued generation in MISO South.

Factors for consideration in setting study area cap that may result in a lower or higher limit in that study area, relative to existing load in that area, are:

• Import & Export limits and patterns
• If significant amounts of generation are being added to an area of the system, then export limits from that area of the system will need to increase. That is an appropriate outcome of the DPP study).
  • LSE resource adequacy requirements exceeding the cap (represented by LSE Load Forecasts in the DPP Study Area plus Reserve Requirements and Zonal Clearing Requirements).
  • Maintaining existing generator Pmin output in power flow models (e.g., must run requirements for baseload units).
  • Dispatching sufficient existing generation to reflect realistic dispatch assumptions for existing and prior-queued generation, relative to the limitations of the existing transmission system in study models to accommodate new generation seeking to  interconnect such that the DPP studies identify the upgrades necessary to accommodate higher penetration of IBR generation in a local area, and avoid  creating study models that require the addition of unrealistic transmission system upgrades in the study models and study results.
  • TO & IC limits to constructability, the 3-year COD from GIA execution should be realistic, e.g., taking into consideration the number of upgrades identified in the study relative to necessary Transmission-system outages, available resources and materials, and general supply chain issues currently impacting the construction of new generating resources and transmission system upgrades.
  • Other ongoing local or regional transmission planning efforts that may be relevant to DPP studies like:
    • LRTP
    • JTIQ
    • Concerns of some Owners that MISO’s redispatch of MTEP studies will cause transmission planning issues in future MTEP and other study models when existing generation and generation with newly executed GIAs are ultimately dispatched together. 
      • Other relevant factors that may be identified by the TO or MISO, such as:
      • Consideration of IRPs & RFPs to demonstrate how many MW of existing generation is expected to stay online in the five-year DPP Study Model horizon and should thus be included in study models to appropriately evaluate how new generation and existing generation will interact on the system and avoid issues with deliverability of new and existing generation in operations.
      • In many cases, generation is not necessarily being added to meet load requirements; it is being added to meet the demands for renewable energy.  This results in queue sizes that exceed existing generating capacity and load in DPP Study Areas, to a varying degree, and to MISO as a whole, making the size of the group of new generators included in generation interconnection studies unmanageable.  Therefore, the amount of new generation included in study models, including prior queued generation that does not have an Executed GIA, must be limited to produce reasonable study results that reflect existing and anticipated power flows.  For example,
        • assume 10,000 MW of existing or pre-queued solar in an area, and another 10,000 MW of solar in the queue in the same area. 
        • If the existing solar was turned down to 5,000 MW to get the study to solve with the new 10,000 MW of solar, and the new 10,000 MW was interconnected, there would be 20,000 MW of solar in an area that can only accommodate 15,000 MW. 

Turning down the existing solar generation to accommodate the new solar in the study would not be reasonable because in real time these resources would be seeking to inject at the same time.  Their output would not be deliverable to load or the market, and future planning models would be distorted as well, ultimately leading to:

• overloads in future DPP Base models and transmission planning models and limits in operational models or
• requiring the local transmission owner(s) to build new transmission projects that would be cost-allocated to the local load, and
• Real Time congestion not allowing low or zero-cost solar resources in the area to be dispatched, increasing energy prices.

While MISO has stated that new generation is likely lower cost than existing generation, the Owners do not agree with this logic because financial investments have already been made in existing resources.

Overall, the goal in setting the DPP Study Area cap should be to produce realistic DPP Study Results that:

• do not begin with overloaded study case models and  
• appropriately identify and mitigate voltage support issues associated with newly interconnecting projects.

Corresponding Limitation on the number of MW any one developer can submit into a future cycle

The Owners do not have a strong position on this element of MISO’s proposal but acknowledge both the rationale behind it and the concept and the complications in the overall reform construct introduced by this element of MISO’s proposal.

Data Needed for Development of the Details of the Reform Package

When this effort was kicked off, the Owners commented that it would be useful to evaluate the data MISO referenced at the May 31 PAC to inform discussion on appropriate queue sizes and other potential reforms.

Specifically related to the project withdrawal data, it would be useful to have the data presented by: 

1. Cycle and region
2. Stage of study withdrawals occur
3. Network Upgrade costs at which projects have withdrawn (by study cycle and stage).

This will allow more granular examination of historical trends to evaluate likely triggers for project withdrawals.

While MISO did provide some of this data at a very high level in PAC and IPWG meeting materials, referenced in the comments above, the high-level data provided by MISO does not support evaluation of relevant data at a more granular level to assess potential reasons for withdrawal to better shape changes being considered to improve MISO’s GIP.

The Owners request that MISO provide data supporting the reasonableness of MISO’s assumption that raising entry costs will lower queue sizes (MW) and whether this is needed when the enhanced entry requirements proposed would address concerns relating to speculative projects entering a limited queue and more importantly, MISO’s proposal to limit the size of DPP studies.

Perhaps MISO could assess the information available in the ~822 “done” queue projects referenced by MISO to find commonalities in their traits to evaluate other appropriate readiness measures, rather than increasing M2 Payments, which may not result in improving the quality of projects in the queue but may result in increased cost of energy to consumers.

Referenced Items:

The Scoping Form includes the following Agenda items to be addressed during the Scoping Call:

1.      Interconnection Customer to confirm model information status submitted for GI project(s) (i.e. inverter information, manufacturer type, etc.)

a.    Please confirm

☐ Model information has not changed since submittal of interconnection request

☐ Model information has changed since submittal of interconnection request (please note affected J numbers below)

2.            Confirmation and viability of the proposed POI for the noted GI project(s)

a.  For Interconnection Customer

i.  Please confirm

☐ POI has not changed since submittal of interconnection request

☐ POI has changed since submittal of interconnection request (please note affected J numbers below)

b.  For Transmission Owner (TO)

i.  Please confirm

☐ TO has no comments regarding proposed POI for the noted GI project(s)

☐ TO has comments regarding proposed POI for the noted GI project(s) (i.e. open positions at substations, expansion required, approach to substation for new project gen tie line, alternate POIs, PSCAD model requirement, etc.)

1. Comments (If applicable)

While we appreciate the opportunity to submit feedback on MISO’s first proposal of Generator Interconnection Queue Improvements, a ‘final’ proposal on August 30^th does not allow enough back-and-forth and idea iteration for such an important topic. With significant downstream effects and commercial implications, these process changes are not trivial and will affect most of MISO’s stakeholders, to some degree. We are further concerned because MISO admits that some of the changes have not been fully developed or thought out. Following the August 30^th presentation, a second feedback request – at a minimum – is necessary to hone the proposal.

In general, Steelhead supports the Clean Grid Alliance (CGA) comments, developed with consensus from the CGA members. We would like to add/highlight the following feedback items:

• We believe that increasing interconnection customer penalties is not an effective solution to the fundamental problem of studying large amounts of generation in the MISO powerflow models. We need to update MISO’s model building and dispatch processes to work with the changing nature of the grid and the influx of interconnection requests. Relying on the annual model building process will continue to cause slowdowns and backlogs in the queue.
• We do not believe that a MW queue cap will be an effective solution. After two queue cycles at a reduced level, the amount of generation in the models will still be back to current levels.
• The automatic withdrawal penalty, when projects do not share Network Upgrades and do not harm remaining projects, goes against FERC’s long-standing provision on demonstration of harm to similarly- or lower-queued projects. The proposal of graduated withdrawal fees under no harm conditions adds no value. In many instances, a late-stage withdrawal is not under the control of the developer and is influenced by external factors.
• A transactional sale restriction prior to Phase 2 – or at any phase of the process – is harmful to all generation developers and should not be added merely because MISO is worried about MW developer cap workarounds. Developers regularly engage in M&A activity at all phases of the interconnection cycle and across Transmission Providers. Having a sale restriction in MISO will hamper M&A transactions across the US.

Introduction

 The MISO G&T Cooperatives[1] (”G&Ts”) appreciate the opportunity to comment on MISO’s queue reform initiative. As a group of Generation and Transmission Cooperatives, we have the dual responsibility of ensuring an appropriate resource portfolio to serve our members’ load and to plan and maintain transmission facilities and contracts to deliver energy and capacity to our members at a reasonable cost.  This provides a unique perspective with respect to the interconnection process as we can potentially fill any of three distinct roles in the process:  Interconnection Customer, purchaser of the output from an Interconnection Customer’s generation, or the Transmission Owner. 

The G&Ts acknowledge that the queue backlog is neither a MISO-only problem, nor one created by MISO. Our partner for many services, ACES, works with five RTOs and several large, non-RTO transmission providers.  All queues are backlogged and facing similar issues.  Further, conflicts about queue processing began before MISO launched its tariff.  So while MISO did not create these issues, G&Ts appreciate that MISO is working to address them.

Overview

 There are two possible approaches MISO can take to resolve the queue issue, both of which require MISO to define success before starting, then map back to demonstrate that the proposal supports a successful outcome.  As an example, drawing a design requirement from the recent OMS Survey, might be “MISO’s Interconnection Process will be able to process a minimum of 21 GW of requests per year[2] to a Generator Interconnection Agreement, with appropriate transmission plans in their agreements to comply with applicable NERC standards.”

To achieve this defined measure of success, the G&Ts proposes two possible paths:

1)      Revisit the whole point and purpose of the queue

2)      Develop an appropriate “fast lane” for projects that meet certain criteria

Note that MISO’s proposed changes could be key elements in either path, if they are fleshed out a little further.  Further note that MISO was quoted in the trade press[3], and heard by many staff members of the G&Ts, as saying they really don’t know if the elements of their proposal are actually going to work.  Given the seriousness of the capacity situation, the G&Ts believes it would be helpful for MISO to provide more supporting analysis to prove to stakeholders that the proposed changes are likely to be successful. The G&Ts believes that a more methodical approach is required.

Revisiting the Queue

 Consider the following factors:

1)      The queue was designed in the late 1990’s to place new generation from both utilities and independent power producers on an even playing field with respect to transmission access

2)      RTOs were in development but not yet operational

3)      Reserve margins were considerably higher than they are today

4)      State Renewable mandates were not yet in place

5)      Another purpose of the queue was to appropriately assign costs of network upgrades to avoid one set of customers unduly subsidizing other sets of customers

6)      In MISO, since 2010, only about 8% of the total transmission plan has been classified as Network Upgrades, and some of that is in areas that reimbursed the generator for the upgrades

What’s the purpose of the queue in today’s landscape? Is it still the best approach to add generation in a wholesale competitive landscape?  Or put more bluntly, are the efforts at reforming the queue just putting another coat of paint on a crumbling house? Is there a better way to add generation reliably and fairly to the grid?

G&Ts believe that Wholesale generation competition is a net positive and has provided financial benefits for end use customers.  But having that competition play out in the battle for access to the transmission grid is causing uncertainty and delay in portfolio planning for load serving entities.  That uncertainty and delay gets factored into the prices negotiated among the parties and are hurting end use customers.

Develop a Fast Lane in the Current Queue Process

 If the current process is maintained, the best MISO’s offer allows is that if a project is high probability of being developed, such as an upgrade to an existing plant and/or has a buyer for its energy and/or capacity, it can get lumped in with up to 73GW of queued generation for normal processing. We would prefer that a project with a high probability of being developed skip to the head of the line, be processed on its own with a defined set of base case assumptions, likely modeled with the MTEP case and generators with interconnection agreements.  This is the definition of “First Ready, First Served.”

These projects have a significantly higher probability of success than is the current reality with most greenfield renewable projects that are running in the 20% success range.  Yet, these high probability projects are getting bogged down by low probability ones.  For example, there are over 300 GE F-Class machines across the country that are due a Hot Gas Path major maintenance.  Instead, they can receive an Advance Gas Path (AGP) upgrade giving them an additional 10% capacity with a 2-3% improvement in heat rate.  This can be performed in a matter of a couple of years. Unfortunately, due to the backlogged queue, adding this capacity will take 4-5 years.  This represents up to 5GW of additional dispatchable generation, which MISO and others (such as NERC), have clearly indicated as being needed. 

MISO has resisted proposals that use a valid buyer or PPA as a gateway to a fast lane, arguing that there’s limited ability to effectively evaluate the viability of purchase contracts. However, MISO’s current proposal requires the review and audit of real estate transaction documents for proof of site control. With this in mind the G&Ts believes that MISO could at a minimum apply the same level rigor and judgement to power purchase agreements as the required site control documentation..

To make things easier on MISO, the G&Ts presents an alternative method of indicating that a project has a buyer and should move to the front of the line.  The outline is as follows:

• Queued generators are given a selectable source node on OASIS
• Market Participants with a valid NITS contract can designate the generator on OASIS as theirs under the terms of section 30.2 of Module B of the MISO Tariff
• Transmission Service Request (TSR) processing will not commence until the interconnection studies are done, and if the developer withdraws the project, the TSR would be refused (denied?).  If the project obtains NRIS through its GIA, it is accepted and auto-confirmed.  If the project receives ERIS, then an impact study in the TSR queue will be offered and begun.

This proposed process alleviates MISO from arbitrating power contracts and instead allows MISO to focus its limited resources on the most likely to be developed projects.  This is not unduly discriminatory because a project, whether it is a self-build or under contract from and independent power producer, with a committed purchaser is more likely to be successful versus a project that does not have a buyer.  And while there are out clauses in most power contracts, there are also out clauses in land contracts for site control, and in either type of contract there are usually penalties to pay for breaking the contract. 

If MISO still rejects the reasonable criteria that a buyer is one scenario for a more probable to be developed project, then the G&Ts encourages MISO to study the 822 projects listed as “done” in its queue (as of July 20, 2023) to identify the attributes at each phase of the process that best indicate project readiness.  Another criterion that will also dramatically increase the probability of a project being developed is a developer signing a Provisional GIA and forfeiting their right to milestone payment refunds. Projects like this should also be considered for a Fast Lane. The G&Ts are near certain that correlation can be drawn between developed generation projects and common features they had before getting in the Queue or had early in the Queue process.

 While creating this fast lane would not be a fast process for making changes, it would be more reasonable than the rationale proposed thus far.

Comments on MISO’s Proposed Changes

 MISO’s proposed changes to the deposits and making withdrawals more costly could be key components to either a newly imagined interconnection process or a fast lane.  Taking the fast lane as an example, if a load serving entity wants to contract with an 800 MW baseload plant, under MISO’s proposal its Interconnection Customer would have to put down $9.6M in deposits.  For that level of a deposit, the Interconnection Customer should get more consideration than just an inclusion with up to 73GW of other, new generation in that cycle. 

With respect to the higher deposits, MISO’s current requirement of $4000/MW is far less than other RTOs, such as SPP at $8000/MW so $12,000/MW is clearly more.  MISO has not provided any clear evidence that this number will change Interconnection Customer behavior.  The CRA report does kind of tie the $12,000/MW number to expected network upgrade requirements, so MISO could pick a percentage of the average upgrade costs as a target and then update it every new queue entry cycle.  There is still no evidence that this will change behavior, but tying the milestone to something related to the process is more rational than just picking a number.

Expanding the definition of harm does make sense, as time spent processing a withdrawn request is time that could be spent on a more ready request, and that time delay and uncertainty does result in higher prices to the end use customer.   And if a project inflicts harm on other projects, then it should face a consequence. 

As proposed, the yearly cap may actually cause further delay.  If the cap is the 73 GW estimated from MISO’s comments, and 171 GW show up again, then 73 GW goes forward in the prompt year, another 73 GW in the next year, and the balance gets added to the third year.  So while the process may run more efficiently, there’s still a 2.5 year pause on new requests entering the queue.  Better to look at the positive side of advancing ready projects with historically proven attributes than slowing the input to the study queue.

Comments of the Southern Renewable Energy Association

The Southern Renewable Energy Association (SREA) appreciates the opportunity to provide feedback on MISO’s ‘strawman proposal’ for Generator Interconnection Process Improvements. SREA also appreciates the scheduling of a workshop to address stakeholder concerns about the proposal that were not addressed in the PAC meeting. Overall, we are concerned that the stakeholder process dedicated to this topic, which significantly impacts our members, is not optimal and is rushed considering the scope of changes in the proposal. While a workshop was held on 8/7, similar to the solicitation of stakeholder feedback on the 5/31 PAC presentation introducing the initial GIP reforms, it was only scheduled due to stakeholder outcry that more time was needed to vet stakeholder concerns. Also, the workshop was not accompanied by any presentation materials. The public stakeholder process on this issue has been reactive at best to stakeholder concerns, and the claim in the 7/19 presentation on GIP reforms that ‘a high majority of stakeholders agree with MISO’s direction’ and that ‘MISO had dozens of individual meetings with stakeholders from multiple sectors’ without any public record of who or what was discussed, does not resemble a robust or transparent stakeholder process. 

FERC’s release of Order 2023 also complicates MISO’s proposal. In its current form, SREA is concerned about the effectiveness of a filing at FERC that is not well vetted by stakeholders over the suggested four month timeline consisting of only one meeting and a workshop that discusses MISO’s strawman proposal, in addition to a forthcoming compliance filing on Order 2023. Considering the tone of the discussion at the PAC, a filing at FERC is most likely to experience opposition, which would ultimately delay implementation of reforms further. The time spent on a probable delay would likely be better spent in the stakeholder process developing an interconnection process reform that stakeholders feel confident will address the issues leading to current challenges to processing requests in a timely, transparent and efficient manner.

The correct approach to interconnection queue reforms should not be default to the status quo or to apply an administrative cap to the amount of MW’s entering into the queue. The interconnection queue process is intended to provide generators with a clear expectation of transmission upgrade costs associated with a generation resource sited at a specific location.  MISO’s analysis of needed interconnection upgrades should instill confidence and be transparent. Withdrawals from the queue happen when there is neither transparency in process nor a clear expectation of costs, and that causes re-studies. It is not enough to just raise the barrier to entry for interconnection customers to address the study needs for the amount of projects in the queue. This does not directly address the need for the efficient processing of requests. Investing costs in measures that increase efficiency could directly address this challenge, but just raising costs alone will likely just result in more submissions from fewer developers. The current proposal runs the risk of creating a chilling effect which decreases competitive development of projects in the queue, and potentially to under-procurement of resources throughout the footprint. MISO should provide transparency into how funds collected from milestone deposits as well as penalties will be dedicated to queue process improvements, if at all.

While adopting more restrictive requirements than other regions may seem like a way to reduce the queue size, there appears to be little evidence to support such a move. Queue growth in MISO has exceeded both SPP and PJM this past year; however, PJM’s growth far exceeded MISO’s last year, and SPP’s queue has historically been larger than MISO’s. All queues are increasing in size [1]. As new technologies become cost effective, those new technologies are added to the queue on top of older technologies, expanding queue sizes. That trend is clear for solar, batteries, hybrid resources, and in some regions, offshore wind. As the industry expands generator technologies, the queue will also change, and likely grow. 

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Position Summary

Moving forward MISO should take care to preserve a competitive environment for developers submitting projects to the queue. Preserving a competitive environment has downstream impacts on the competitiveness of the wholesale market. Increasing milestone payments for interconnection customers and applying financial penalties more broadly are likely to favor larger, more well resourced developers, and these reforms will have downstream impacts on the wholesale market making it less competitive as well. For developers who may have to increase costs to cover the investment in submitting to the interconnection process, there should be a clear line for developers to understand how funds collected by MISO in milestone payments and financial penalties are invested in ways that enhance the interconnection process. Ultimately, the end goal should not be just to cap submissions to the queue, but to run an efficient queue process that properly staggers study phases such that results are predictable and representative of expected system conditions. To increase efficiency and timely processing of interconnection requests, MISO should consider conducting multiple interconnection cycles per year. Doing so would allow for more manageable queue cycles and the timely processing of interconnection requests that are only increasing in recent years. 

In summation, SREA strongly believes that reform is needed for the MISO interconnection process, but the correct approach should be thoughtful and lead to a durable GIP tariff. In a post-IRA, post-Order 2023 MISO footprint, priority should be given to the enhancement of the interconnection process and to necessary staffing to meet the influx of requests and the integration of grid enhancing technologies into studies, and not just to focus on limiting queue requests and getting a reform approved as quickly as possible. 

Dedicate Funds to Queue Support

Interconnection cycles have challenged MISO’s current process due to a significant increase in requests. This increase can be attributed to increased interest in renewable energy resources from MISO members, state public policy goals, as well as the passage of the Inflation Reduction Act, which provides a number of incentives for renewable energy and energy storage over the next decade. The queue, while much larger this year than previous cycles, is an indication of a new normal in developer interest in generation projects in MISO, and should be recognized as such. Not all projects will be built that enter the queue, but when MISO considers all the requests that are reasonable to process, they should not ignore the fact that major policy drivers for the next decade forecast a much larger queue than the historical trend. MISO is currently expecting customers to pay more, but not receive better service. MISO needs a plan to adjust to this new normal by dedicating a significant portion of any increased fees to hiring additional staff and/or consultants, as well as investing in additional computing power. 

Replace a Cap with a Sliding Scale for M2 Deposits

SREA does not support an approach to limiting the queue by a percentage of peak load, or by a limit per developer. This still needlessly inhibits competition, and appears to be an arbitrary threshold that does not recognize more relevant issues regarding POI headroom, or land use restrictions. Further, setting a cap and a developer limit adds additional administrative burdens, as well as creating a difficult first-come, first-serve queue-rush at the beginning of a cycle. Setting a cap inherently creates inequalities that MISO would likely rather not have to arbitrate. 

SREA discourages MISO from setting one single application price point at an exceptionally high level. The currently proposed $12,000/MW cost will indeed dissuade some project developers from entering projects in the queue; however, the developers most influenced by this move will undoubtedly be smaller companies with fewer projects. MISO has already noted [2] that the top three companies submitted 30 percent of the 2017-2020 queue project megawatts. The next twenty-two (22) companies submitted the next 19 percent of megawatts, thus the top twenty-five (25) companies submitted half of the projects. Over two-thirds of the megawatts proposed by these top twenty-five companies were withdrawn, whereas only about half of projects from all companies were withdrawn; the smaller companies are not causing queued projects to be withdrawn at a higher rate than the larger companies. As such, MISO’s high proposed single price point for entry penalizes the companies that are least responsible for queue entries and withdrawals. 

Instead we propose a solution that encompasses the MISO proposal’s increase in milestone payments, but introducing a sliding scale based on the number of megawatts a developer submits to an interconnection cycle. Providing a sliding payment scale allows for queue customers to choose their own level of involvement in a planning cycle, while attributing higher costs to customers requesting more service. A sliding scale will ensure that developers across a spectrum from small to large will be able to enter the queue in a competitive environment that reflects correlating costs per MW of queue impact and correlating facility and network upgrades necessary for the delivery of their product to market. 

Increases in Later Phase Deposits 

SREA has another concern that was voiced by a stakeholder during the 8/8 GIP Workshop related to large increases in M3 and M4 payments. If the purpose of higher deposits is to limit the queue size at entry to a cycle, these increases are counter to that goal. The other issue is that currently, milestones payments accrue cumulatively to reflect an increasing proportion of expected Network Upgrade costs. Under the current strawman proposal, an IC is paying more than double than what accrues in the current process. Given this arrangement, actual upgrade costs may be far exceeded by funds collected at this point. SREA proposes that MISO retain the current M3 and M4 deposit structure to eliminate this possibility, which could face credible complaints about overpayments in a final filing at FERC, and delay implementation of reforms.  

Energy Storage

It should be acknowledged that any cap to MW’s in the queue may inherently limit interconnection requests for standalone storage as well. While this may not be the intention, standalone storage charging from the grid has an inherent synergy with other resources in the queue, and this needs to be captured. To do this, MISO should first revise dispatch for interconnection requests so that contribution to load is not just nameplate value, but the energy contribution to the system. Capturing a more realistic dispatch of resources is crucial for interconnection studies; but as FERC has noted in Order 2023[3], energy storage is much more dynamic as a resource that is both load and generation and has technical capabilities that are underrepresented in MISO’s current interconnection processes. 

Improve Site Control Requirements

MISO’s proposed site control requirements mostly appear to be based on SPP’s current site control requirements [4]. Such an updated requirement may be helpful; however, within the current MISO queue process, a POI may be changed at a later time by a transmission owner or MISO. A project developer where a POI is changed should be allowed to withdraw their request without penalty, or be provided an amount of time to cure their proposal. Also, a project developer should be allowed to withdraw projects without penalty, if a local or state policy change occurs that inhibits project development, such as stringent siting requirements, or even bans. Similarly, if requirements for POI site control are applied retroactively for projects in late queue stages, those projects should not be subject to withdrawal penalties. 

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Automatic Penalties 

MISO is proposing applying automatic penalties to projects withdrawn at various stages, including 10% of M2 deposits before the kickoff of DPP1. This is highly problematic, and is essentially a penalty applied before harm to a cluster of interconnection customers is even possible. The harm calculation to determine liability for automatic penalties should be improved, but not zealously applied. Automatic withdrawal of funds should only be after communication with an interconnection customer that a threshold of expected costs for upgrades does not qualify the project for penalty free withdrawal.

Overall, SREA is opposed to MISO’s proposal for applying automatic penalties. For applying penalties as a result of harm calculation, we strongly suggest that rather than just proposing a historical threshold of 10-25% of outlying costs in a cycle to identify projects that are able to withdraw from the queue penalty-free, there should also be a backstop of a percentage of projected capital costs per project as well. For example, no developer would proceed with a project that entails upgrades that amount to a third or more of the capital cost of a project. MISO’s current proposal with an absolute percentage threshold based on historical cycles for outlying costs does not provide certainty for interconnection customers in the event that costs are outside the norm, but still falling below a pre-defined, backwards looking 10-25% threshold. A penalty free withdrawal backstop provides developers with greater transparency and confidence in the process, knowing that they will not be on the hook for upgrade costs that would make their project financially unfeasible. Furthermore, the number of backstop qualified penalty free withdrawals occurring at sites near POI’s could provide an important datapoint for future interconnection customers and transmission planning efforts. 

SREA suggests the following option for Automatic Penalty Threshold: 

- Interconnection requests that are assigned upgrades that fall into the highest 25% of historical costs per MW assigned to individual projects within a study cycle will not be subjected to an automatic penalty for withdrawal. 

SREA suggests the following option for a penalty free withdrawal backstop: 

If an interconnection request does not fall into the highest 25% of costs per MW  assigned to a cycle for upgrades; a backstop percentage of capital cost amount will qualify a project for penalty free withdrawal based on the following criteria: 

- To account for higher average initial costs between Decision Points 1-2 that are assigned upgrades amounting to $100,000/MW[5]  or above, the request should be granted penalty free withdrawal.

- From Decision Point 2 or beyond, upgrades assigned to a project amounting to 30% or greater than the projected capital costs of a project seeking interconnection, which initially recieved estimates 30% or below the projected capital costs for the project seeking interconnection between DP1-2, will qualify a project for penalty free withdrawal. 

Communication With IC’s Regarding Withdrawal Penalties

MISO proposed re-allocating  funds collected from automatic penalties to pay for studies or network upgrades associated with projects that remain in the queue; however, MISO did not propose a process to inform remaining interconnection customers  of potential payments. Given the likelihood that withdrawing projects will seek exemptions, and potentially litigate the withdrawal penalties, it seems unlikely that MISO will have a firm known quantity of penalties to supply to a cycle of successful queue projects, potentially even after GIA’s are signed. To provide clarity, MISO could set a cap on withdrawal penalties, where excess penalties received would be refunded to withdrawn projects. For example, MISO could set the withdrawal penalties cap at $5 million for a queue cycle (for all projects, combined), so remaining projects could better anticipate that approximately $5 million may be available to help offset costs for studies or upgrades at the end of a cycle. 

There is also a possibility that MISO over-collects funds due to a high level of withdrawal, to an extent that the penalties may exceed the local costs of remaining projects seeking a GIA. MISO should establish protocols for this scenario, including possibly refunding excessive withdrawal penalties. 

[1] https://emp.lbl.gov/sites/default/files/queued_up_2022_04-06-2023.pdf 

[2] https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20Charles%20River%20Associates%20Queue%20Reform%20Report629633.pdf

[3] FERC Order No. 2023, pg. 50, Par. 52 

[4] https://cdn.misoenergy.org/20230719%20PAC%20Item%2006%20GI%20Queue%20Improvements%20Proposal629634.pdf

[5] Referencing the values on Slide 15 of the Charles Rivers Associates whitepaper posted in the July 19th 2023 PAC meeting materials, $100k/MW or above seems to be a reasonable outlier for DP1 costs assessed given a median value of ~$80k/MW for years 2017-20

Consumers Energy thanks MISO for the opportunity to provide feedback on Generator Interconnection Queue improvements presented at the July 19 PAC. Consumers Energy agrees certain reforms to the MISO Generator Interconnection Queue process should be contemplated to ensure a reliable, efficient, and timely interconnection process.

As both a Load Serving Entity (LSE) and Interconnection Customer (IC) Consumers Energy is uniquely positioned to provide feedback on MISO’s proposed queue reforms. Consumers Energy’s Clean Energy Plan, approved by the Michigan Public Service Commission, includes adding nearly 8,000 MW of solar generation by 2040. Any generation queue reforms proposed by MISO should be designed to encourage, rather than hinder, an LSE’s ability to deliver on its renewable energy commitments.

Consumers Energy submits the following comments on MISO’s proposal to improve the Generator Interconnection Queue:

Improved site control requirements for Point of Interconnection (POI) should contemplate changes in circumstances outside of an IC’s control.

Consumers Energy supports MISO’s proposal to require ICs to demonstrate site control from the generator site to POI with the following milestones:

50% site control upon application, or $80,000/mile for entire line mileage to POI

50% site control and 50% of IC switchyard, if necessary, prior to Phase 2

100% site control from generator to POI, including IC switchyard, if necessary, prior to GIA negotiations

In supporting this proposal, MISO should also hold Transmission Owners (TOs) accountable to provide robust, accurate, and timely feedback to an IC’s request for information to accurately identify an acceptable POI through a MISO tariff requirement and Business Practice Manual (BPM) language. This is required to ensure TOs have the processes and resources in place to perform an assessment of the proposed POI.

Multiple stakeholders, including TOs, indicated in the various meetings that a proposed POI cannot be guaranteed to be 100% viable until the Interconnection Facilities Study is completed during Phase 2. If the POI applied for is changed after the start of Phase 1 due to circumstances outside of the IC’s control, then the IC should be given time to assess the financial impact of the change in POI and decide whether to proceed or withdraw.

If proceeding, no additional milestone payments should be collected to reflect the change in POI and the requirements to demonstrate site control from the generator site to POI not yet demonstrated by the IC should be waived except for 100% site control from generator to POI, including IC switchyard, if necessary, prior to GIA negotiations.

If withdrawn, no more than 25% of the M2 milestone should be collected as an automatic withdrawal penalty regardless of study phase.

MISO should continue to keep the present definition of Site Control and acceptable documented rights as stated in the Tariff, Attachment X.

Automatic withdraw penalties should be used to offset the costs of network upgrades and MISO should make the total amount of penalties collected by region publicly available.

Consumers Energy supports the distribution of penalties collected (by region) to those projects in the study cycle (by region) that execute a GIA (in that region). MISO should make the total amount of penalties collected by region publicly available at each phase of the study cycle.

For interconnection projects where International Transmission Company (ITC) or Michigan Electric Transmission Company (METC) will be a signatory to the GIA and the costs of network upgrades are reimbursed subject to Tariff Attachment FF, penalties distributed to projects that execute a GIA should be used to offset the costs of network upgrades to be rate-based by the TO or applied to the Transmission Owner Interconnection Facilities (TOIF).

Qualifications for Penalty Free Withdrawal should be simplified but MISO has failed to provide a comprehensive proposal to stakeholders

Consumers Energy agrees that Penalty Free Withdrawal provisions should continue to exist and supports MISO’s proposal to simplify the qualifications for Penalty Free Withdrawal to only apply between Phase 1 and Phase 2, and again between Phase 2 and Phase 3. However, the current proposal does not allow stakeholders to evaluate how MISO intends to adjust the qualifications of Penalty Free Withdrawal so that only the top 10-25% of projects would qualify. Absent further clarity from MISO, it is not possible to have an open and transparent stakeholder process that meaningfully addresses stakeholder concerns. To date, the stakeholder process, including the additional workshop, has not substantively answered the additional tactical questions presented by stakeholders.

A Study Cycle Cap (Limit by MW) should include conditions to qualify under the safety valve beyond a PPA award.

Consumers Energy supports MISO’s proposal to have a safety valve that allows projects that can demonstrate a level of certainty in off-take into the study cycle even if above the cap. However, MISO should expand the conditions to qualify under the safety valve beyond a PPA award to also include a capacity solicitation award or approval by a state entity as acceptable. This is necessary to account for the fact that an LSE developing its own projects would not have a PPA award.

A single Developer Cap (MW Limit) by study cycle should not be shared by a regulated public utility and its unregulated affiliates.

The current proposal lacks a clear definition of “developer” for purposes of establishing a developer cap. If a developer cap by study cycle remains in MISO’s proposed reforms, MISO must carefully define “developer” and specify when entities must share a developer cap. Specifically, MISO should not broadly apply a developer cap to all entities owned by a single parent company. For example, a regulated public utility should have a separate developer cap from its unregulated affiliate even though the regulated public utility and unregulated affiliate are owned by the same parent company. Treating regulated public utilities and unregulated affiliates as a single “developer” for purposes of the cap would interfere with FERC Affiliate Restrictions requiring separation between these entities and pose concerns of improper sharing of information under the Affiliate Restrictions and FERC Standards of Conduct. Moreover, treating a regulated public utility and unregulated affiliate as two distinct developers for purposes of the cap would not undermine MISO’s concern of multiple LLCs being created by a single parent company to circumvent a developer cap.

MISO should not unduly restrict the transfer or interconnection rights for a project when the transfer is associated with a capacity solicitation award or approval by a state entity and will be utilized by a Load Serving Entity in IRP/capacity solicitations through a build-transfer agreement (BTA), or Developer Asset Acquisition (DAA)

Consumers Energy submits the following questions seeking clarification on MISO’s proposal to improve the Generator Interconnection Queue:

The interaction between automatic withdrawal penalties, qualifications for penalty free withdrawal, and milestone payments at risk at each phase of the DPP study process is unclear. Particularly, is it possible for the automatic withdrawal penalties to exceed the milestone payments collected? We recommend that MISO provide a flow chart to clearly visualize MISO’s proposal for a hypothetical 100 MW projects in its meeting materials for the August 30th PAC meeting.

Does MISO propose the single developer limit to be determined as a percentage of load based on the MISO-wide footprint or individual study region?

If the single developer limit is determined by MISO-wide footprint, could a developer submit their entire allotment into a single study region representing a higher percentage of that study region?

If the single developer limit is determined by individual study region, could a developer submit their maximum allowable allotment in every study region representing a higher cumulative percentage across the MISO-wide footprint?

Consumers Energy submits the following additional proposals to improve the Generator Interconnection Queue:

Definitive Planning Phase (DPP) Phase 1 of a study cycle shall not start until Decision Point #2 of the immediately preceding study cycle has been completed. This would improve the dependability of study models by allowing most projects that will withdraw in the preceding study cycle prior to finalizing the study model. This would be similar to how PJM staggers its study cycles.

MISO should document the most realistic project In-Service Date in its Interactive Queue as a result of each study phase. Presently, the Interactive Queue displays the Applied In-Service Date and a Negotiated In-Service Date, however, the Negotiated In-Service Date remains blank until a GIA is negotiated and there is no obligation for the Applied In-Service Date to be updated throughout the study cycle. Throughout the study phases, a TO may indicate that it is unrealistic to construct Interconnection Facilities or Network Upgrades by the Applied In-Service Date. In such cases, the IC and TO should agree on the most realistic project In-Service Date and MISO should document this in-service date in its interactive queue. Including this reform will help improve GIA negotiations because IC and TO expectations for a realistic in-service date will be set ahead of the GIA negotiation phase. This would also be helpful for utility capacity planning and capacity solicitation screening requirements.

MISO should document reasons for project withdrawal to have the data to inform future queue reforms. MISO could consider withholding any funds to be reimbursed to an IC upon withdrawal until the IC provides a reason for withdrawal to ensure ICs are responsive.

A milestone payment true-down at the beginning of Phase 3 should continue to occur. We propose that the amount to be withheld by MISO can be updated from 20% of total Network Upgrades costs to the greater of 20% of total Network Upgrades costs or 100% of M2. Amounts in excess of the amount withheld should continue to be refunded to the IC as soon as practicable.

MISO should calculate both the study cycle cap and single developer cap using the MISO MTEP Series (planning) models the study cycle will be based on. MISO should publicly post the resulting study cycle cap and single developer cap at least 90 days prior to the study cycle application deadline.

Respectfully,

Dan Alfred

     Pine Gate Renewables appreciates this opportunity to submit comments regarding the MISO strawman proposal presented at the Planning Advisory Committee on July 19.  We also appreciate that MISO held an additional Generator Interconnection Queue Improvements workshop on August 7 to answer additional stakeholder questions. 

     We agree with our peers that a full stakeholder process is warranted, and that alternative, stakeholder-driven solutions need to be explored to determine the best approach to wholistically address this issue.  However, Pine Gate acknowledges MISO’s immediate need to facilitate a manageable queue size for the 2023 cluster—one that is conducive to efficient and meaningful study results.  For this reason, we are generally supportive of several aspects of the proposal, including increased requirements to POI site control and setting caps for the cluster and by parent company.  However, there are other parts that we ask MISO to reconsider.  There are significant costs and risks being made to customers “everything, everywhere, all at once,” which are excessive and will not solve the main issue of an unmanageable Phase 1 cluster study.

Milestone Payments

     Pine Gate has concerns with the dramatic increase in M3 and M4 payments. These increases do not address the immediate need of having a smaller initial cluster size.  Additionally, the proposal deviates from FERC Order No. 2023 and current industry practice to have milestones payments accrue cumulatively and reflect an increasing portion of expected Network Upgrade costs. Below is an example based on a 100 MW facility using the Network Upgrade $/MW cost averages in the Charles Rivers Associates Report:

     Not only is the customer paying more than double compared to current practice and paying over half of the expected Network Upgrade costs from Phase 2, but as the table shows, customers may likely end up paying more in milestone payments than they will actually have to pay for Network Upgrades (as shown in the Phase 3 costs).  This is not an anomaly but based on average Network Upgrade costs.  MISO’s proposed approach therefore fails to satisfy the “just and reasonable” standard under section 205 of the Federal Power Act.  

     Instead, M3 should be reinstated into the M4 formula, with a true-down like in current practice, so that customers’ cumulative investments in milestone payments will not exceed 30% of Network Upgrade costs determined in the Phase 2 study results.

     Pine Gate also supports lowering the proposed M2 to $10,000/MW, as it is still a significant increase from the status quo, within the range of Charles River Associate’s recommendation, and will provide the intended impact in combination with the other measures in the proposal. 

Automatic Withdrawal Penalties

     Pine Gate does not support having automatic withdrawal penalties prior to DPP Start. While we support having a cap, we do not believe that a withdrawal has caused harm to other customers at this stage, as there are no expected results customers have been able to utilize to make decisions.  If anything, MISO needs to encourage speculative projects to withdraw at this stage, to deter withdrawals during the cluster studies when there is more harm to other customers. The pre-screening is really the first time that projects can gauge whether the project’s interconnection position is viable (given the makeup of requests in the cluster), so they should not be penalized for seeking that information.  Lastly, this does not align with FERC Order No. 2023, which allows customers to withdraw during the customer engagement window without penalty.

     We also would like MISO to clarify how it intends to use automatic withdrawal penalties, and if any unused funds would be returned to the customer.

Cluster Cap

     Pine Gate conceptually supports MISO’s proposed use of a cluster cap, as it is the only measure proposed that will guarantee a manageable 2023 cluster size.  However, we have concerns allowing a safety valve for projects with PPA to exceed the queue cap. This is discriminatory against independent power producers, who cannot possibly attain a PPA before knowing their interconnection costs and timelines. This also goes against the goal of attaining a certain queue size to run an efficient cluster study. If projects are so developed as to have a PPA, they should be expected to submit as soon as a cluster window opens. As FERC has removed non-financial milestone requirements in Order No. 2023, we ask MISO to remove PPA considerations from the interconnection process.

     We also have concerns with the rollover process once a cluster reaches its cap.  If there is significant overflow, the cluster request window can itself become a backlog, and projects with their M2 deposits may be locked up for years before their studies begins.  Pine Gate recommends that MISO removes projects that exceed the cap and have them resubmit in the next year’s cluster window.

Parent Company Cap

     While Pine Gate is generally supportive of the proposed parent company cap, we oppose the proposed prohibition on the sale of projects before Phase 2.  First, there is a fundamental legal question regarding MISO’s ability to prohibit parties from engaging in such transactions.  To date, MISO has provided no legal authority to support the proposed prohibition. 

     Legal questions aside, the proposed prohibition is overly broad and overly restrictive, especially given most developers will never reach the 7300 MW cap. Instead, we suggest either bringing the date earlier to Phase 1 (or the end of DP1), or including in the attestation that the parent company will not exceed the cap through Phase 2, including through purchases.

Penalty-Free Withdrawals

     While we are generally supportive of incrementally increasing PFWs to reasonable levels, we recommend that the percentages and $/MW increases are smaller between Phases 2 and 3 than between Phases 1 and 2. Pine Gate appreciates that, as interconnection customers progress through the interconnection process, financial commitments should incrementally rise to ensure that nonviable projects exit the queue.  However, those financial commitments should be coupled by increasingly accurate study results.  As such, customers expect Phase 2 results to be more indicative of final Network Upgrade costs than Phase 1 results. It follows then that PFW threshold between Phases 2 and 3 should be smaller than the threshold between Phases 1 and 2.

Pre-Screening

     Given the higher risks and costs borne to customers for entering a cluster study, customers should be allowed more time to perform due diligence on their pre-screening results. MISO’s pre-screening results are useful but require significant work and discussion before producing meaningful results that can indicate the viability of an interconnection site. We recommend extending the time to 15 business days. 

Thank you for considering these comments in advance of issuing a final package. We look forward to continuing the discussion at the August PAC meeting.

BW Solar Appreciates MISO’s reception of comments on the GI Queue Improvement Proposal as presented in the July 2023 PAC.

BW Solar would appreciate it if MISO could provide clarification on the following four issues:

During the presentation, BW Solar inquired about requirements for a cash percentage (or all) of the milestone collateral postings. We would appreciate further clarification on which securities (Cash or Letter of Credit) will be acceptable. If a certain percentage must be in cash, does MISO expect that percentage of cash posted to change at the end of each phase?

BW Solar would appreciate MISO detailing how the queue size limits apply to the subregions for the interconnection study (Central, East (ITC), East (ATC), West, and South). Will the limit be implemented on a prorated share based on peak load (coincident or regional), annual energy usage, or other metrics?

As proposed, MISO would take at least a fixed portion of the milestone payments based on when a project withdraws. These withheld funds would offset other same-cluster interconnection customers' network upgrade costs. BW Solar seeks clarification on two issues. Would the withdrawal penalty be redistributed based on study regions or MISO overall? Second, if network upgrades are reimbursed by the Transmission Owner (i.e. ITC in Michigan), what would happen with the penalty funds from the withdrawn project?

Finally, BW Solar also wants further clarification on the proposed no agreement to sell the project to a different developer until after Phase 2. Would this only apply to buyer parties potentially exceeding the developer limit or all parties? Would this tracking be based on queue positions sales, LLCs sales, or another metric? Would mergers and acquisitions of development companies be considered a sale? BW Solar believes that implementing of this requirement could become cumbersome and difficult.

BW Solar appreciates MISO’s time and effort in formulating a proposal for queue reform.

Savion, LLC (“Savion”), a Shell Group portfolio company, is an industry-leading utility-scale solar and energy storage project development company. Savion respectfully submit these comments on MISO’s Interconnection Queue Reform Proposal. Savion is an active participant in the MISO administered markets and stakeholder process and has been monitoring MISO’s efforts to make the interconnection queue process more efficient given the growing backlog of projects entering the queue.

 Comments

Like MISO, Savion agrees that project queue sizes have grown to unmanageable levels.  This has resulted in large study delays, high Network Upgrade costs, inaccurate modeling, and unintended project uncertainty.

 In the interest of addressing these issues Savion feels that the most important reform required to address these problems is to limit the size of the queue to no more than 50% of load in a respective region and introduce a staged application process as highlighted below.

 To facilitate this proposal and ensure fairness to all Interconnection Customers (ICs), we recommend a MW injection limit for each IC looking to file projects into the queue.  MISO would determine the number of ICs  interested in filing projects by opening a Declaration Window whereby each IC desiring to file projects must submit notice to MISO that they intend to file projects in the upcoming window. If the IC fails to file its intent, the IC will no longer be allowed to participate in that particular queue cycle during State 1. With that information the following simple formula could be used to allocate how many MW’s each company could file.

 MW available per cycle as determined by MISO = M (where M = 50% of Peak load)

# ICs desiring to submit projects = E

Project (P) = M/E, where P is the allocation of MW’s for each IC that they are allowed to submit in Stage 1

Following the open declaration window. Savion would then suggest MISO update the application window process to include two stages as discussed below.

1. Stage 1

• ICs are allowed to file “P” number of MWs and up to 10 Interconnection Requests.

1. Stage 2

• Any remaining capacity is available for any IC to file on a first come first serve basis until “M” MWs of available capacity is reached.

With this process, all the developers get an equal opportunity in the queue and it also helps MISO since the queue size is more manageable. This would lead to more accurate models and meaningful pre-screened results. In addition, Penalty Free Withdrawal becomes more effective since ICs will have accurate data to drive financial decisions.

 While this does extend the application window, it allows for fairness amongst ICs while resolving the legacy problem of the unmanageable and oversized interconnection queue that has plagued MISO for years.

 This will also necessitate MISO to review the inherent conflicts with parent companies and their subsidiaries that could disrupt the intent of this proposal. Savion suggests that MISO require an affidavit or documentation of project company hierarchy to resolve this issue.

 Savion also commends MISO on the need to ensure Affected System study results are completed in a timely manner. In compliance with FERC Order No. 2023, we are confident that MISO will standardize the process in compliance with the new rule which Savion supports.

 Lastly, Savion would like to respond to the following changes proposed by MISO.

• M2 increase from $4k/MW to $12k/MW

-       Savion opposes this proposal.

-       We would propose a compromise of $6k/MW.  If MISO looks to increase the M2 milestone to $12k/MW as proposed, it will incentivize ICs to stay in the queue as they have more money at risk sooner in the process.  While this will have the effect of reducing the M3 and M4 payments later on, the fact that the money is at risk sooner sends the wrong signal for projects to withdraw earlier in the process.  We encourage MISO to incentivize viable projects throughout the study process.

-       MISO also states that Charles River Associate (CRA) study is separate from their own study to arrive at the $12k/MW proposal. However, we are uncertain as to how MISO developed their rationale on using 15%, 20% and 25% of the Network Upgrade costs to arrive at the $12k/MW number. In addition, the sample median and sample average calculation seem to be incorrect. We kindly suggest that MISO provide stakeholders more information on how they arrived at the $12k/MW proposal and suggest further discussion on this calculation.  

• M3 increase from 10% of Network Upgrades to greater of 20% of Network Upgrades or $1000/MW

-       Savion supports this proposal.

• M4 increase from 20% of Network Upgrades to greater of 30% of Network Upgrades or $1000/MW

-       Savion supports this proposal.

• 50% site control requirement from generator site to POI at application, $80k/mile for entire line mileage to POI

-       Savion supports this proposal.

• 50% site control from generator site to POI AND 50% of IC switchyard Prior to Phase 2

-       Savion supports this proposal.

• 100% site control from generator to POI, including IC switchyard, prior to GIA negotiations

-       Savion supports this proposal.

• Penalty Free withdrawal threshold changes

-       Savion opposes this proposal in the Penalty Free withdrawal rules. 

-       Savion firmly believes that the Three Stage Study process works well and should incentivize non-viable projects to withdraw and not linger in the queue.  By increasing penalties, MISO would send the wrong signal to ICs.

• MISO will eliminate PFW between Phase 1 to Phase 3

-       Savion opposes changes in the Penalty Free withdrawal rules. 

-       As noted previously, MISO should incentivize non-viable projects to withdraw and not linger in the queue.

• Automatic penalty imposed for withdrawal

-       Savion opposes changes in the Penalty Free withdrawal rules.   

• 10% of M2 before DPP Start (would be removed if cap is not part of final solution)
• 25% of M2 at DP1
• 50% of M2 at DP2
• 75% of M2 during Phase 3,
• 100% of M2 during GIA negotiations and beyond

• Limit the number of MWs in a queue cycle and also cap the number of projects a single developer can submit. As proposed ICs at 60% of MISO Peak load, single developer at 10% peak load

-       Savion strongly supports this proposal.

-       Savion suggests a limit on generation allowed into the queue in the following forms:

• A cap on overall generation allowed into the queue at no more than 50%.  Savion supports this or the lesser limit is necessary to help bolster meaningful results and Network Upgrades.  Injection above this level may introduce modeling errors and unrealistic constraints since it would result in reducing dispatch levels of existing and prior queued generation, which is not a realistic scenario.
• A cap on individual companies and MWs as allocated per the staged process proposed by Savion above. 

• Projects with PPAs not subject to the cap

-       Savion opposes to this proposal. 

-       All projects should be subject to the same limits as proposed by MISO regardless of having an executed PPA or not.

• If the 60% limit is not reached, individual developers can submit above the 10% cap

-       Savion supports the proposal to impose limits on queued generation with suggested modifications described herein.

-       Our proposal will allow ICs to submit additional projects if the cap set by MISO is not met.

• If projects are withdrawn, other projects in the queue will be used to replace them, and the remaining projects will get pushed to the next cycle

-       Savion opposes this proposal. 

-       Savion highly discourages MISO to allow projects to push to the next study cycle. Instead, we suggest these projects be denied and required to reapply. This would allow for updated and transparent information for ICs that remain in the process, as well as for those entering the next queue cycle. Savion would also like to emphasize that once the application window is closed that no further changes or backfilling should be allowed. Any changes in the application window can affect the study results for existing queued generation as they move through the process.

Alliant Energy appreciates the opportunity to provide feedback on MISO’s proposed package of queue reforms.  Alliant Energy is supportive of continued efforts to make MISO’s queue process more efficient and workable for all parties involved.  Provided below are initial responses to the reforms that MISO has proposed.  We believe the most impactful change MISO should make is limiting applications into the queue each cycle.  This change is likely to have positive cascading effects on the process, as a result, MISO needs to be cautious about overcompensating with other reforms that moved forward.  MISO should continue to work with stakeholders to arrive at a balanced set of changes that address the primary issues with the queue.  Alliant Energy would also like to MISO explain further what returns interconnection customers can expect from increased requirements and how MISO is continuing to improve and address challenges such as the timing and accuracy of study information.

Setting limitations on the number of MWs that will be allowed in future cycles

The biggest issue MISO needs to address with its queue relates to size.  This should be the focus of MISO’s reforms and Alliant Energy believes addressing this head on is the best approach.  Alliant Energy supports setting a cap of the number of MWs allowed in each cycle.  This ensures that reforms will be successful in addressing the most pressing issue with the queue.  MISO’s proposed 60% cap based on peak load, however, warrants more discussion.  Alliant Energy initial impression is that a cap of 50% or lower may be needed to have a real impact on process improvement.

Limitations on the number of MWs any one developer can submit into a cycle

Alliant Energy believes that a cap should also be placed on the number of MWs an Interconnection Customer can have in a cycle.  We have concerns though that a purely first come first serve approach is best way to implement this.  Alliant Energy suggests MISO consider having two open windows for submission of projects in a cycle.  With this approach, a single Interconnection Customer would be limited to a certain amount of MWs and applications in the first window (e.g., five applications for no more than 1,000 MWs).  After this window closes, MISO would calculate the remaining amount of MWs left to be utilized for the second window.  MISO would provide this information and then open a second window to fill the remaining MWs available. This type of approach would help prevent one developer from having too large of a share of MWs in a cycle and also address the concern about queue submissions becoming a game of who can click submit the fastest. 

Also, and very importantly, Load Serving Entities (LSEs) need to have a guaranteed ability to submit applications in the queue as they are responsible for meeting resource adequacy requirements and serving customers reliably.  To the extent there are limits on the number of applications an Interconnection Customer can submit, LSE applications should be accounted for first, with remaining MWs then opened to other developers.  90% of customers in the MISO footprint are served by utilities that have an obligation to serve.  MISO should ensure its process reflects this and works with the overwhelmingly predominant regulatory paradigm in the footprint.    

MISO should also consider factoring resource type with MWs accepted into a cycle.  For example, if a high percentage of requests are for a certain resource type in the first open window (suggested above), then MISO should consider giving priority to other resource types in the second window.  This will help ensure a continued balance resource fleet in the footprint and help prevent the market from becoming flooded with a projects that are ultimately not needed or built.

Finally, MISO also needs to have provisions in place that prevent affiliates of a developer from being an end around to having a greater share of MWs available in a cycle.

Increased POI site control requirements

Alliant Energy is ok with adjustments to site control requirements but not as proposed by MISO.  MISO already has a high bar with 100% site control for the generation facility essentially required when a project is submitted.  Also, the MISO queue process should enable the most cost-effective projects to be developed which means there needs to be a certain amount of flexibility in the process.  As a project navigates the queue, the location of the optimal POI can change (especially early in the process).  MISO allows a POI move by showing the change is not a Material Modification.  The queue process should have similar flexibility related to POI site control and not contain requirements related to the POI until later in the process such as DPP3 or GIA execution.  Also, a POI site control requirement early in the process stands to create potential confusion and disruption to landowners from a need to change or cancel agreements as Interconnection Customers react to study information provided by MISO.  Further, as noted above, having a cap on the number of MWs that can be submitted in a cycle is the most effective way of ensuring a reasonable amount of projects enter the queue each year.

Increased M2, M3 and M4 milestone payments

Alliant Energy can support an increase in milestone payments but believes that MISO’s proposed increases appear excessive considering other changes being proposed.  We suggest MISO could move forward with M3 and M4 changes but that the M2 increase should be lowered.  MISO needs to be mindful that to the extent the queue becomes more expensive to navigate, that this can simply result in higher costs to customers as developers factor these costs into projects.

Escalating automatic penalty upon withdrawal

Alliant Energy is ok with incorporating an automatic withdrawal penalty as proposed by MISO.

Adjusting penalty free withdrawal provisions and reducing availability

Alliant Energy would like to better understand what MISO is envisioning with changes to penalty free withdrawal provisions.  Large changes in interconnection costs have primarily been a factor of the number of projects in the queue, transmission system capability and projects dropping out.  We believe a combination of an appropriate cap on the number of MWs allowed to enter each cycle as well as the continued progression of regional transmission planning (e.g., LRTP and JTIQ) will help control large swings in transmission costs.  Any changes in penalty free withdrawal provisions should factor other changes being made in the process and progress with system planning.

Other Comments

In additional to the changes which MISO has proposed Alliant Energy offers these thoughts:

• Timing of next cycle:  Rather than have a continuous uncertain timeline of when the next queue window will open, MISO should just state the next window will not be until a further out period such as June 2024.  Having a more certain window is more helpful than guessing as to when the next cycle will open.  Also, MISO and Transmission Owners have a significant amount of work to do in processing current queue cycles. Alliant Energy believes it would be wise to allow time to make progress on existing applications before more are accepted.

• Implementation Plan:  Given the nature of changes being proposed, Alliant Energy believes changes should be applied going forward only and not retrospectively applied to existing study cycles.  The changes MISO has proposed are significant and it would be unreasonable to place these requirements on existing interconnection applications as Interconnection Customers did not have the benefit of knowing these requirements prior to submitting current applications.

• Study Accuracy:  MISO should have reforms targeted at improving the accuracy of study results.  For example, making sure decisions make in prior study cycles are incorporated into future studies as well as reflecting all withdrawals or changes to projects into current studies.

• Other enhances to the process:  In addition to the changes which MISO has proposed, provided below is a list of other items which would be helpful for MISO to implement.

• Create the ability to submit surplus and generation replacement applications via the MISO GI Online tool.
• On the MISO Extranet, create subfolders to organize study information.  For example, on the SIS Study Results tab, create folders for information such by region and then by study cycle and DPP (e.g., West—2020—DPP1).  This would save interconnection customers from having to scroll through list of files to try and find what they are looking for.
• Creating a live dashboard on the MISO website with information on what study cycles have feedback requests open and which are at decision points.
• Provide additional tracking of project status including projects with GIA and their current expected COD.

MRES appreciates the opportunity to provide feedback on MISO's queue reform proposal.  MRES is generally in support of the changes proposed by MISO, however we also encourage MISO to ensure items from the Pro Forma LGIP outlined in FERC Order 2023 are included.  Specifically, we request that MISO retain its existing Cash in lieu of Site Control for entities that cannot obtain site control due to regulatory restrictions, as is currently outlined in the MISO Tariff in section 7.2.1.2 of Att X, or as outlined in the Pro Forma LGIP in section 3.4.2.(iii).

RES is in support of:

1. Automatic Penalties for withdraws and using those penalties to help offset costs for the rest of the queue, and a stricter penalty free withdraw process.

• As Charles River pointed out, the largest customers are responsible for the largest amount of withdraws. Having automatic penalties, and a stricter penalty free withdraw criteria will reduce the amount of pure speculative projects being put into the queue.

1. A Cap on queue size / submissions from companies and their subsidiaries.

• Ensuring the largest of the developers can’t circumvent this cap is of utmost importance, and RES agrees with the penalties of withdrawing all projects if a customer is found to be circumventing these rules.

RES does not agree with:

1. Increasing the M3 and M4 payments without changing how those payments can be at risk.
   • As described now, this change does not work towards the goal of decreasing speculative projects, and queue delays by preventing withdraws in later phases.
   • Increasing the M3 payments by 10% more depending upon NUs or $1000/MW does not impact speculative projects going ahead after DP1. This is because the M3 is not held under any risk until the final DPP phase, so this M3 increase is only placing a larger credit burden on customers without much more risk of proceeding. RES recognizes the increase in M2 and the automatic penalties for withdrawing, which may prevent some speculative projects from pushing into DPP phase 2, however we think if there will be an increase in the Network Upgrade based Milestone payments, those payments should be able to be used if a project does withdraw during Phase 2 in order to help offset some cost for projects wishing to continue. 
     
     
2. Preventing sales & Transactions for projects in the queue prior to certain phases
• MISO is proposing a new rule that would prevent projects from being transferred before study phase 2. RES agrees with the intention of this rule, which is to prevent circumventing the per-company MW limitations. However, RES believes that the implementation of this rule could have unintended consequences that could work against MISO's goal of disincentivizing non-viable projects from entering the queue.
• First, RES is concerned that this rule could place undue pressure on less capitalized companies. These companies often invest more in the front-end, making a viable project that can be sold once its viability has been demonstrated in the MISO studies. However, if they are unable to transfer the project before study phase 2, they may be forced to withdraw from the queue altogether.
• Second, RES is concerned that this rule would create incentives for uncompetitive behavior from more well-capitalized companies. By flooding the queue with non-viable projects, more highly capitalized companies can create higher network upgrade costs that will force smaller companies to withdraw. Once the extra, non-viable projects have served their purpose of pushing out smaller companies, they will also be withdrawn. MISO is therefore incentivizing behavior that will ultimately result in more restudies and more unpredictable network upgrade costs.
• RES believes that MISO should reconsider this rule and adopt one that incentives developers who submit projects that have gone through a diligent greenfield process, rather than simply barring all sales. This would create a more competitive environment and incentivize submission of only viable generation projects.
  
  
3. RES is concerned about the first come first served mentality in queue submissions, as this opens the opportunity for technological / system failures which could impact certain customers over others if there is a rush for the queue once it opens.

The Issues:

EDF Renewables (EDFR) supports and appreciates MISO’s process that has to a point reasonably evolved. Ideally, EDFR would prefer that no significant changes would occur but believe that this is not functionally feasible for MISO (or other RTOs) to meet its purpose and mission, hence FERCs 206 action with their recent Order Number 2023.

MISO DPP study cycles (clusters) have become unwieldly with marked increases in study cycle megawatt (MW) amounts and project numbers. This has resulted in “clogging” the DPP and resulted in the process timeline(s) and outcomes to be degraded, a failure to meet the purpose. This massing outcome has come about from increased demand, viability, and need for resources, the bulk being renewable resources. To manage the volumes and allow the DPP to serve its purpose there is need for business practice and Tariff changes to better manage the number of new requests in future study cycles. For the DPP to function there is need for appropriately sized study cycles with well vetted projects. This will result in faster process times, more accurate study results, and quicker implementation of the resource evolution with the needed transmission upgrades.

The investment attractiveness of submitting projects has been complicated by the well-intentioned motivations in the Inflation Reduction Act (IRA) and a rush to enter the queue as soon as possible (too early) due to the DPP timelines stretch to unreasonableness. The process requirements have not kept up with the investment attractiveness to require more due diligence in identification of projects ready to be submitted and expected to result in built facilities.  

Proposed Solution:

Less volume with the most ready and vetted projects in DPP study cluster.

Changes to the queue process should appropriately incentivize submission of fewer more ready projects per study cycle. A smaller study cycle will result in study times better approaching the MISO intended timeline, and study results will have more value at decision points. This should result in earlier withdrawal of uneconomic or less economic projects, reducing the need for later phase restudies and later stage withdrawal. With faster study cycle timing, cycles can be unstacked and spread out to minimize adversely effecting other study cycles and needs for restudies. With the timelier study process as many or more projects and MWs should be able to interconnect.

To encourage submission of better and more ready projects and facilitate better quality results and timelier DPP completion, unfortunately changes need to be instituted as FERC has explained. Changes to the level of requirements, costs, and risks need to be increased. EDFR believe this can be best achieved by simultaneously turning multiple levers to increasing financial commitments at earlier DPs, adjusting financial commitments based on an interconnection customers (ICs) ability to prioritize their most valuable interconnection requests (IRs), increasing risk with adjustments to harm tests and contemplate MW limits to a study region.  

Note, (D1) Application fee and (D2) DPP Study Funding deposit MISO is in the process of clarifying with updated Tariff language to Attachment X, 3.3.1 on how deposits are used and updating D1 for inflation. 

In MISO Generation Interconnection Process order, find EDRFs reasoning and then proposed changes:

1. Pre-Queue process

Application Milestone (M1) include requirements D1 and D2 as well as technical requirements around a definitive Points of Interconnection (POI). It is reasonable to expect ICs have done their due diligence around their POI and to require ICs to show their work.

Addition to the Pre-Queue process:

• Increase Point of Interconnection (POI) site control requirements

2. Application Review

EDFR contends that the volume issue is a result of deposits and deposit risk having become too lax, as a result the number of project submitters have markedly increased mostly from project flippers, those whose end plan is to sell their project (positions) to builders and/or owner/operators and established developers that have flooded or spammed the queue with volumes of projects, note MISO explained that the top 5 developers account for ~30% of total volume. To address this issue cleanly on both ends, i.e., in totality with one formula, EDFR proposed to increase M2 deposits formulaically basing the “MW” amount in the formula on the number of megawatts submitted by parent company. Therefore, there would be one M2 calculated for each parent company that participated in the study cycle or cluster. The formula will increase the M2 exposer to all and encourage parent companies of all sizes to be purposeful and diligent in the projects that they submit. This approach to raising M2 will not styme competition and will incentivize due diligence.          

Change to Application Review M2 calculation:

EDFR exponential proposal, noting exponential effect could be formulaically moderated, for example with a divisor applied to the exponent, e.g., 1.001^ MW/2  

• Total parent company M2 for a study cycle = $4,000 * MW * 1.001^^MW

For project M2 calculation used for DPP calculations, project M2 is the MW share of the project from the parent companies M2, i.e., project $/MW for parent company = parent company M2/ parent company total cycle MW; project M2 = project $/MW for parent company * project MW.

Automatic withdrawal penalty ….

From FERC Rule 2023 for reference

It is logical that studying MW amounts reaching or exceeding expected load levels is not functional. This requires turning off all existing and expected future energy resources to dispatch the study cluster and then study the “expected” flows and identify transmission system (grid) upgrades. In effect, you are trying to study flows and identify upgrade needs from pretending you don’t have coffee in your 12 oz cup and trying to fill it with 12-14 oz of new hot coffee, i.e., study MWs meet or exceed need and take no account for existing or expected resources.  

To address this head-on and simply, MISO should contemplate and investigate methods to appropriately institute explicit, potentially soft limits on study MW volume per study cycle, logically making limits by study region and as a % of expected peak load. EDFR has not fully flushed out the concept of what megawatt amount is a reasonably limit, say 30% of study system peak or the workings of stacking projects be time stamp of submission and action to be taken with “final” project admitted in the cluster, i.e., let in last project that exceeds the cap in the cluster or have that project be the first project in the next study cycle.

Change to Application Review cycle cluster size limit:

• Details to be flushed out with MISO and TOs, for example: using timestamps stacking, limit the study MW to X% (e.g.,30%) of the peak load in each of the five MISO study regions, i.e., West, East (ATC), East (ITC (Michigan)), Central, South.
• MISO’s proposed cap of 60% of peak load seems relatively high. MISO should consider somewhat reducing that percentage to a lower number such as 30-40%.
• The cap per parent company of 10% of the study cap is quite high and would have a minimal impact to any of the companies that have historically submitted the most requests. EDFR’s proposed M2 escalation based on parent company MWs would address this issue. Alternatively MISO should cap this amount at 5% or lower of the study size.
• EDFR opposes MISO’s most recent proposed exceptions to the cap (such as for those projects with PPAs) will only erode the effect of having a cap in the first place. The cap should be relatively hard without exceptions. Unintended consequences of providing an exception for projects with PPAs include future devaluing of PPAs – in the end even projects with PPAs are somewhat speculative until they receive reasonable certainty in the network upgrade costs and timing to achieve COD.

3. Definitive Planning

Sufficient staggering of study cycle clusters is required for ICs to have relative confidence in study results and to take actions accordingly. At a minimum, the previous cycle needs to be through DP1 to allow updating models used in next cycle, resulting in better, more informative results. The ideal and goal is to delay beginning the next cycle until DP2 has been completed prior to starting the next definitive planning cycle. This will result in even more valuable and informative results in DP1 of the next cycle, more informed and intelligent decisions earlier in the process. This will facilitate earlier departure of uneconomic projects and more informative results earlier and then later in the three-phase process. If changes are made to increase entry fees and at-risk monies as EDFR has explained here or in some similar fashion, for changes to be workable, functional, and EDFR believe acceptable at FERC, Interconnection customers (ICs) need better information to make informed decisions on, as staggering would offer. Otherwise EDFR fears that decisions and evaluation of risk will be required to be made on results that are so removed from reality that the decision on whether or not to proceed becomes a very expensive game of chicken.  Not starting the next cycle until the prior one passes DP2 would balance the higher milestone requirements with giving ICs much more indicative information on which to base their decisions to proceed at the various decision points. The need for balance cannot be overstated given the much higher payments and risk profile MISO has proposed.

“Penalty free” provisions found in Attachment X of MISO OATT section 7.6.2.4 Withdrawal and refund due to increase in Network Upgrade costs could be revised but should not be eliminated. Penalty free withdrawal is a reasonable and important part of the MISO DPP (discussed in MISO BPM 15 in section 6.2.11). EDFR suggests that instead of looking at revising the % increase between phases in 7.6.2.4, the $/MW floor that is currently between $10,000-20,000/MW should be increased by a factor of 5 to 10. e.g., for increases in estimated upgrade costs across DPP Phase I to DPP Phase II Network Upgrade (also Affected System) costs of more than $50-100,000 per MW is eligible for Milestone payments refund. This will raise the bar significantly for projects that receive lower cost estimates in earlier study phases. Additionally, this change will not negatively impact those projects that initially receive higher costs in their initial study results, where the current percent increases (25% to 50%) will function reasonably and appropriately.

Change to Definitive Planning “penalty free” calculation:

• Increase $/MW floor by a factor of 5 or up to 10
• e.g., increasing this value by a factor of 10 would be to $100,000/MW, $150,000/MW, and $200,000/MW in the MISO OATT Attachment X Section 7.6.2.4 in numbers 1,2,3 respectively. 

In conclusion EDFR believes the reforms offered should result in future study clusters:

• having fewer requests in a queue cycle
• with fewer higher risk project requests
• that are easier to process, leading to faster results

This will result in:

• reducing late withdrawals
• fewer restudies
• increased certainty, e.g., value in Phase 1 results, for customers in study results

WEC Energy Group supports stakeholder review and discussion of the generation interconnection queue entry and exit provisions in an attempt to create a more manageable queue.  MISO has proposed a number of entry and exit reforms that all have merit and deserve full stakeholder debate.

While WEC Energy Group believes that changes to queue entry and exit provisions are needed, we are not convinced that MISO's proposed package of reforms is optimized.  For example, MISO wants Interconnection Customers to work with TOs prior to submitting an interconnection request to find an appropriate POI.  In our experience, TOs are not staffed and do not have the processes in place to perform that assessment.  Even if a TO works with an Interconnection Customer to establish a POI prior to entering the queue, that analysis and POI are not binding and can change as formal studies and engineering analyses are performed.  Unless tariff and BPM language obligate TOs to take action on pre-queue requests to establish a POI that is binding, we are not convinced that the proposed POI provisions are appropriate within the package of reforms.  WEC Energy Group recommends further stakeholder discussion with MISO and TOs to determine whether or not the POI provisions are workable.

1. Review of M4 formula:

Previously, M4 was calculated as (20% of Network Upgrades - M2 - M3). However, in the revised formula as part of this queue reform proposal,

M4 = The greater of (30% of Network Upgrades - M2) or $1,000 /MW. Not including M3 in the new formulation, makes M4 significantly expensive and somewhat erroneous since M3 has already been   paid.  We do recommend the inclusion of M3 in the M4 formulation.

2. Recommendation for eliminating Penalty for withdrawal before DPP and at DP1:

Although a major reason for introducing the withdrawal penalty is to check speculative projects and indiscriminate project withdrawals, the speculative nature of the queue assumptions for prospective projects in determining the feasibility of their projects before entering the queue cannot be over emphasized.

 For a project to be able to determine its impact on the MISO system, hence its feasibility, full information on the impact of other queue projects would be needed to make a more definite determination than a speculative one since study is done in a cluster. However, such queue information cannot be determined until interconnection application window has closed.

We would therefore recommend the elimination of Penalty for withdrawals before DPP and at DP1 since projects cannot be penalized for information they do not have before the generator interconnection application window closes.

 The withdrawal penalty should be maintained at DP2 and DP3, by which time a more definite impact of other queue projects can be assessed in determining limiting constraints.

3. Exception to developer cap of 10% of total MW size cap

1. A developer can exceed its cap if the circuit(S) for which it is applying for interconnection has (have) no other applications.
2. Prior to the beginning of each cycle, the total MW cap should be published so that developers can plan accordingly.

4. More transparency in the feasibility study

1. Include a probability assessment that an applicant’s project could be one of the cost outliers at DPP 1.
2. Also include an early assessment of the amount of MW’s that are competing with applicant’s project at the time of feasibility.
3. Add commentary about MISO’s view of whether a project could ultimately be feasible given knowledge of its system.
4. Both of these might encourage early withdrawal of projects where it may be clear that they will be infeasible.

5. Sale of interconnection queue positions that are to be withdrawn
1. In instances where a developer does not have the capital to move forward in the interconnection process, but the project may still be feasibility, create a bidding procedure to allow other developers to purchase an interconnection position.

6. Priority for future cycles
1. Developers who succeed in completing the interconnection process and build projects should be given priority of interconnection in future cycles.

Vesper Energy is in support of MISO's queue improvement requirements involving higher deposits up front. We are also in support of the site control requirements that MISO proposed. As a smaller sized utility-scale renewable energy independent power producer, Vesper Energy is concerned about the overall MW cap and company MW cap. We completely understand there is a need to have an overall MW cap to match MISO's overall MW load. However, we want to strongly encourage MISO to please revise the company MW cap to a smaller percentage of the overall MW cap, maybe 5% or lower. This will allow smaller sized independent power producers and developers to participate within MISO and not be brushed aside by bigger, more capitalized companies who could fill their company cap quickly. MISO's load demand would greatly benefit from a variety of capitalized companies because we have learned first hand that it's not about quantity but quality of the asset you're trying to develop. Quality can be determined by a number of factors such as de-risking a project site from a variety of high costs and schedule risks. This doesn't always correspond to who has the most capital to spend.

In addition, Vesper Energy suggests that MISO please make a provision around not being able to sell a project until a certain point within the interconnection process.

Thank you in advance for your consideration.

Regards,

Vesper Energy Team

The purpose of the queue reform is to reduce speculative projects and promote the projects with more readiness or due diligence. The overall queue cap with the first come first serve allocation mechanism will not be effective and in fact will be counterproductive to achieve this result.

The current proposed overall cap is applied in first come first serve base. Since the time stamp of the application dictates the priority of getting allocation in the overall queue cap, it will lead panic queuing behavior by incentivizing developers to get projects into queue ASAP to secure the quota without otherwise spending more time on due diligence. This panic queue behavior can’t be avoided due to the mechanism of this first come first serve overall cap allocation, further it gets aggravated because the auto withdrawal penalty before DPP start is too small to be punitive.

The effective way is to tighten individual cap per developer. The current proposed individual cap is too large to be practical or enforceable and therefore the overall queue cap is more restrictive/binding, which consequently encourage panic queuing. Therefore, applying a smaller individual cap per developer will be more effective not only to limit the speculative projects to maintain a reasonable queue size but also encourage developers to do more due diligence and self-selecting of viable projects. We suggest MISO reduce the individual cap to a more practical number such as 2-3GW per developer based on historic submittal and attrition statistics.