September 8, 2023

 Ørsted Feedback on August 30, 2023, Generator Interconnection Queue Improvements

 Please accept the following comments in response to MISO’s August 30, 2023, presentation on interconnection queue reforms.  Ørsted previously submitted comments on MISO’s July 19 presentation on interconnection queue reform.  Ørsted appreciates the opportunity to comment and the revisions made the proposal, to date, in response to stakeholder input.  Ørsted respectfully suggests that additional revisions are needed to meet the goals of reducing speculative projects and providing certainty to the interconnection process.  Generally,  Ørsted is concerned that the proposed reforms focus solely on increasing responsibilities for the interconnection customer and do not address the role of the transmission owner or the ISO.  Since not all delays are within the control of the interconnection customer, the proposal does not fully address all the issues that need to be considered in order to reduce interconnection queue sizes and provide certainty.    

 One of the primary issues that is not addressed in the August 30 presentation is the role of the transmission owner.  The transmission owner has information about the existing grid conditions and capabilities as well as information related to interconnection requirements.  In addition, while transmission owners do not conduct the cluster studies, the cluster study results are informed by data given to transmission providers by the transmission owners.  Transmission owners are also responsible for design of network upgrades, including both substation and system network upgrades.  The August 30 presentation imposes significant site control requirements on the interconnection customer, active participation from the transmission owner during the scoping will help facilitate the process.  For example, the transmission owner sets the size requirement for the interconnection switchyard and makes determinations as to the appropriateness of the point of interconnection to the substation.  Thus, transmission owners have necessary information and play a key role in the process.  A defined role for the transmssion owner in the tariff, not just the manuals, will help ensure that interconnection customers have the information necessary to make informed decisions regarding points of interconnection and routes.   

 Ørsted offers comments below in response to each component of the August 30 proposal. 

 1.   Increase M2, M3 and M4 Milestone Payments

 MISO proposes that the initial milestone payment (M2) be increased from $4000/MW to $10,000/MW with corresponding increases in M3 and M4.  While we appreciate that MISO has decreased the proposed M2 payment from $12,000/MW, as proposed in the July 19 presentation, to $10,000/MW, the proposed increase is still substantial and significantly higher than the payments in other RTOs/ISOs.  MISO has not fully explained why the significant increase is necessary.  A gradual increase in milestone payments that are reflective of risks imposed on the system would be more appropriate.  Of import, MISO should accept letters of credit for the milestone payments.

 2.   Site Control Requirements

MISO proposes the following: 

-       Fifty percent site control from generator site to point of interconnection upon application, or $80,000/mile for the entire line mileage to point of interconnection;

-       Fifty percent site control from generator site to point of interconnection and 50% of interconnection customer switchyard, if necessary, prior to Phase 2;

-       One-hundred percent site control from generator to point of interconnection, including interconnection customer switchyard, if necessary, prior to GIA Negotiations Execution or within 180 days of Execution with an approved exception.

By requiring site control from generator site to the point of interconnection at the application phase, the proposal does not consider the level of information available to the interconnection customer and does not address all of the issues, many of which are not in the control of the interconnection customer, that can prevent having point of interconnection site control at the application phase and at Phase 2. 

-       Site control to the point of interconnection should not be required until the necessary analyses have been completed to determine that there are no feasibility, stability, or voltage issues impacting the viability of the requested point of interconnection that would result in the transmission owner recommending a change due to issues identified in the interconnection study.  Since this information is not available at the application phase, 50% site control from generator site to point of interconnection should not be required at the time of application.

-       Fifty percent of interconnection customer switchyard in Phase 2 is not feasible as this is an “all or nothing” component of the site design.

-       Applying progressive site control requirements throughout the study phases that reflects the progressive nature of the level of information available to interconnection customers would be appropriate. 

-       Requiring 100% site control prior to GIA negotiations may not be feasible due to local permitting or other project approval process requirements.  The addition of approved exceptions provides some flexibility.  The exceptions should include delays due to regulatory requirements and changes required by the transmision owner or MISO, among others.

-       Interconnection customer should qualify for penalty free withdrawal if the transmission owner or MISO requires a change in the point of interconnection or interconnection facility site control that cannot be accommodated by the interconnection customer. 

In addition, requiring site control at the application phase is inconsistent with Order No. 2023 which states that the interconnection customer is required to select a definitive point of interconnection when executing the cluster study request.  This occurs after submission of the interconnection request, receipt of the information posted on OASIS and the scoping meeting.  The order specifically denies requests that the point of interconnection be selected earlier. (Order No. 2023 at PP200-203).  In addition, the site control and exclusive land control language in Order No. 2023 only applies to the generation site and not to any interconnection facilities.  Per the Order, at the time of the interconnection request, it is only necessary to have site control over the generation site not the interconnection facilities or point of interconnection.  (Order No. 2023 at P 604).  MISO has not explained why the departure from Order No. 2023 is necessary. 

 In relation to demonstration of site control, MISO’s tariff currently allows interconnection customer to demonstrate site control through “1) ownership of a site; (2) a leasehold interest in a site; (3) an option to purchase or acquire a leasehold interest in a site…”  Ørsted seeks confirmation that this language is not changed through the current proposal.   

3.  Withdrawal Penalties  

MISO proposes an automatic withdrawal penalty schedule of 25% of M2 at DPP1; 50% of M2at DPP2; 75% of M2 in Phase 3; and 100% of M2 during GIA negotiations. 

In addition, penalty free withdrawal would only apply between Phase 1 and 2 and between Phase 2 and 3. 

This proposed penalty structure is not reflective of the information available to the interconnection customer at the various stages which impact the ability of the interconnection customer to make informed decisions.  For example, the interconnection becomes aware of the network upgrade costs for the first time at DPP1.  Imposing a 25% penalty at this stage, is not reflective of the information available and the reasoned decision-making process necessary to invest in long-term projects.  Under the current proposal, there is little connection between dollars at risk and project viability.  The proposal also does not reflect the fact that projects could withdraw without causing any harm to remaining projects yet still be required to pay the “automatic penalty.” 

 We are also concerned that MISO’s proposal for automatic penalties may be in conflict with Order 2023.  Paragraph 784 states that: ‘We adopt the NOPR proposal that the interconnection customer will also be exempt from paying a withdrawal penalty if (1) the interconnection customer withdraws its interconnection request after receiving the most recent cluster study report and the network upgrade costs assigned to the interconnection customer’s request have increased 25% compared to the previous cluster study report, or (2) the interconnection customer withdraws its interconnection request after receiving the individual facilities study report and the network upgrade costs assigned to the interconnection customer’s request have increased by more than 100% compared to costs identified in the cluster study report.’ The August 30 proposal is not reflective of this language and information has not been presented to support a deviation from Order No. 2023. 

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

Ørsted appreciates the removal of the per company cap on the number of projects that can be submitted as the focus should be on the quality not quantity of projects submitted.  Similarly, Ørsted does not support limiting the queue size.   Rather than a limit on number of projects in the queue, MISO should consider increased pre-queue due diligence requirements.  This will help ensure that the projects in the queue are of increased quality which will help ensure that they remain in the queue.

Thank you for the opportunity to submit comments on this important issue.  As discussed herein, reforms should focus not only on strengthening requirements for interconnection customers, but also on what changes are needed to ensure that the interconnection customer has information in a timely manner.  Focusing on the responsibilities of all the parties in the process will help reduce speculative projects.  We look forward to continuing the discussion and in hearing from MISO how its proposal complies with Order No. 2023.

 Respectfully Submitted,

 Lopa Parikh, lpari@orsted.com

In addition to other feedback that Wolverine signs onto, Wolverine requests that MISO consider eliminating the option to lease or option to purchase for site control. This would require an IC to execute a lease or close on a purchase prior to entering into the queue. This would align with MISO's goal to create IC risk as a means to reduce/eliminate speculative projects. 

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:

      I.         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

    II.         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.

  III.         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

SB Energy appreciates the opportunity to provide comments on the MISO queue reform proposal. Please see below the comments from SB Energy:

1. MW Cap: SB Energy does not agree with MISO’s revised proposal of removing MW Cap per developer completely even after major support for this proposed change from stakeholders – this removal is clearly favoring larger developers. Given MISO is introducing a MW cap per queue per study region, MISO shall also apply a MW Cap per developer. The argument that MW Cap per developer maybe seen as undue discrimination by FERC (but not MW Cap per queue) is a faint argument. Moreover, this MW Cap per developer proposal has not been submitted to FERC to draw any conclusions. MISO also mentioned at the PAC meeting that MW Cap per developer will be considered in the future if the proposed queue reform still does not reduce the entry of speculative projects into the queue – in that case why would MISO not consider this change now. Also, CRA’s recommendation clearly states the reasoning behind adding a MW Cap per developer and its advantages for an efficient queue entry. MISO should revisit this proposal to ensure fairness and prevent disproportionate control by a few larger developers based on historical data. What is MISO’s plan in reducing speculative projects that will be submitted by larger developers if there is no MW Cap per developer?  
2. MW Cap: There have been several MISO GI Portal access issues for several developers recently (for e.g., IT issues). This has also happened closer to the application submission deadline due to larger traffic of portal usage. If there are similar GI portal IT access issues during application submission window in the future, this may impact some developers (with access issues) while trying to submit applications and they may not be part of the MW Cap per queue per study region (because it is all about timing). How is MISO planning to resolve this issue if there is a genuine GI portal access issue for select developers whereas other developers do not have this issue? MISO should consider email submissions (or alternate submission methods) if such GI portal access issues happen to select developers during the submission window deadline to be part of the MW Cap.
3. Penalty Free Withdrawal: For Penalty Free Withdrawal provisions, MISO shall not apply “top 25% outlier” rule for cost increases due to Transmission Provider/Transmission Owner/Affected System errors in Section 7.6.2.4. It is unfair to Interconnection Customers if MISO applies the “top 25% outlier” rule if the cost increase is due to an actual error in the study. This Tariff provision was originally included to protect IC’s from any study errors.  
4. Penalty Free Withdrawal: For Penalty Free Withdrawal provisions, DPP Phase 1 to DPP Phase 2 is currently at 25% (to 50%) and DPP Phase 2 to DPP Phase 3 is at 35% (to 40%). Given MISO is already applying the “top 25% outlier” rule to these provisions and making them stringent, MISO should not further increase the % increase and keep 25% between DPP Phase 1 to DPP Phase 2 & 35% between DPP Phase 2 and DPP Phase 3. Moreover, a lower % increase should be used between DPP Phase 1 to DPP Phase 2 than DPP Phase 2 to DPP Phase 3 to be consistent with the current Tariff if MISO is still planning to increase the %.
5. Penalty Free Withdrawal: For Penalty Free Withdrawal provisions, can MISO elaborate on this requirement “all other projects should be subject to a harm calculation to determine potential increase in Network Upgrades on other projects” on slide 8 of PAC presentation dated 8/30/2023? This proposal is not reflected in the 8/30/2023 Attachment X redlines posted on the PAC website. Stakeholders should be given a chance to provide feedback on this item because this requirement was not clear on the slide and not included in the posted Att. X redlines.
6. Milestones: M2 amount of $10,000/MW is still very high compared to PJM and SPP where they use $4,000/MW. MISO is using more than double even though the Network Upgrade cost per project with GIA is not this high. MISO should consider a lower number such as $6,000/MW. In general, SB Energy is supportive of increasing the milestones so that less speculative projects will enter the queue, but $10,000/MW appears to be very 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 to $10,000/MW, then Automatic Penalty Withdrawal shall not be considered. 
7. Milestones: Please note that PJM and SPP still uses similar calculation like current MISO’s approach for M3 & M4. MISO should consider keeping the same 10% and 20% for M3 and M4 respectively and only add “or $1,000/MW” requirement, thus not varying drastically from PJM and SPP.
8. Automatic Withdrawal Penalty: Let’s say if an IC moves forward in the DPP process based on a set of MISO results. However, if there were changes to the MISO results due to an error from Transmission Provider/Transmission Owner/Affected System, then Automatic Withdrawal Penalty should be waived for the IC. IC’s shall not be punished due to these type of errors, and errors cannot be fully eliminated especially due to the huge size of the queue.  
9. Automatic Withdrawal Penalty: Can MISO confirm that Automatic Withdrawal Penalty payments will only be used towards System Impact Study costs and not towards Network Upgrade costs? This is not very clear on Slide 7 of PAC presentation dated 8/30/2023 – “Penalty will be used to offset interconnection costs of projects that sign a GIA.”
10. Automatic Withdrawal Penalty: 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.
11. General: 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. MISO should consider applying POI site control requirements to projects in the previous cycles. This will eliminate several speculative projects. 
12. General: MISO should provide detailed responses to stakeholder comments and not just high-level responses to a group of stakeholder comments. We understand that there are a lot of feedback from stakeholders but given the importance of the topic, MISO should provide detailed response to each stakeholder feedback. Otherwise, MISO could miss important stakeholder feedback and not consider them into the queue reform proposal. If this means that MISO requires additional time to review comments and provide responses, then MISO should take more time before finalizing the proposal.

Thank you for the opportunity to provide feedback and MISO’s consideration of the comments.

1.     Introduction

Clearway[1] appreciates the continued opportunity to provide feedback in response to MISO’s proposed interconnection queue reforms, including draft tariff language presented at the August 30, 2023 meeting of the Planning Advisory Committee (PAC).

Clearway reiterates several key themes from its August 9^th comments, namely that:

• The root cause of MISO’s queue problems is not the volume of projects entering the queue per se 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.
• Many options on the table are unlikely to yield the results MISO seeks, while unduly shifting additional costs and risks to interconnection customers (ICs).
• 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.
• If MISO is to proceed with site control requirements for gen-tie lines, such demonstrations are most appropriate at later stages of the DPP cycle, once Phase 2 results can provide ICs with more certain interconnection cost information. MISO should abandon its proposal to require POI site control demonstration altogether, as the POI can change for reasons outside the IC’s control until very late in the DPP cycle.  

Below, we supplement our prior comments with several additional observations based on MISO’s August 30^th presentation to the PAC and subsequent conversations with stakeholders. Clearway also generally supports the comments filed by Clean Grid Alliance (CGA).

2.     Any MW cap that MISO implements must serve as a stopgap until MISO can undertake broader queue reforms, and the methodology for determining the cap should be transparent and based on sound factors

At the August 7^th workshop and again at the August 30^th PAC, MISO staff stated that based on a reasonable attrition of projects in-queue and projects with signed interconnection agreements, there is sufficient capacity to match MISO’s Future 2A planning scenario for at least the next 7 years. At the same time, MISO staff has repeatedly said it must proceed with these immediate queue reform efforts and that this expedited timeline means that MISO is unable to consider more holistic reforms, including to study methodologies and process improvements.

These positions are in conflict. If there is sufficient new capacity to satisfy the Future 2A planning scenario in the near-term, then it is unclear why MISO feels compelled to push forward on a narrow set of reforms, including an overall MW cap. Clearway reiterates its request for MISO, if it proceeds with an overall MW cap, to instead time-limit the applicability of that cap so that it serves as a stopgap until MISO can convene stakeholder discussions in 2024 on broader queue reforms.

Clearway also highlights several questions, some of which other stakeholders asked at the August 30^th PAC, that MISO must consider before implementing an overall MW cap:

• How will MISO address the perverse incentive that an overall MW cap with a rolling application window creates for ICs to rush to submit queue positions, even if those interconnection requests are deficient?
• To avoid an outcome in which MW caps are fully subscribed multiple years forward, and in turn artificially constraining resource deployment, what steps will MISO take to ensure that it can process MW-capped DPP cycles at a sufficient cadence to keep pace with market demand and system needs?
• How will MISO consider different resource attributes (e.g., capacity accreditation, fuel-based dispatch, etc.) when determining if the MW cap has been met? MISO must consider these and related factors when determining whether a “reasonable dispatch” can be ensured.
• What transparency measures will MISO implement to ensure that stakeholders understand how MISO has determined the applicable MW cap by study region?

3.     The proposed PPA “safety valve” is deeply flawed and should be abandoned

MISO staff has justified its proposal for a Power Purchase Agreement (PPA) “safety valve” that would bypass the overall MW cap based on two factors:

• In MISO’s view, projects with a PPA at queue entry demonstrate sufficient “due diligence” and commercial readiness to support entering the queue, even if the MW cap is fully subscribed; and
• A small percentage of projects entering the queue would have a PPA in-hand, and therefore MISO expects this “safety valve” to be used rarely.

This reasoning is deeply flawed. Projects that have a PPA at queue entry are either: (1) the result of transacting among affiliates—in which case MISO’s proposal potentially violates the Federal Power Act, in that it unduly preferences affiliated entities while discriminating against ICs who lack affiliated off-takers, or (2) written with so many contractual contingencies—because a final PPA price necessarily depends on interconnection costs, which cannot be known until queue entry—as to provide no meaningful demonstration of “due diligence.”

The record in response to FERC’s interconnection NOPR (where FERC had proposed requiring a PPA to demonstrate commercial readiness) provides a robust briefing on this topic. Clearway agrees with MISO that FERC’s decision in Order No. 2023 to decline to require a non-financial commercial readiness demonstration has no bearing on MISO’s proposal to introduce a PPA “safety valve.” (as MISO notes, the “safety valve” is not a gating criterion like what FERC had proposed). However, the same arguments in the NOPR record on this topic also undermine the usefulness of PPAs to demonstrate to MISO a sufficient level of project maturity to warrant bypassing the MW cap.

Additionally, if the PPA “safety valve” is to pass muster at FERC, MISO must address an apparent internal inconsistency. If MISO’s contention is that an overall MW cap is needed to produce a “reasonable dispatch” for its study models, then it remains unclear why allowing additional MWs to enter (for projects that have a PPA in-hand) doesn’t undermine this stated objective of ensuring a “reasonable dispatch.”

Finally, MISO has asserted that only a small number of projects are expected to exercise this PPA “safety valve.” Yet MISO has not addressed the likelihood that an overall MW cap together with such a “safety valve” will create a perverse incentive for more projects to execute questionable PPAs in order to guarantee entry to a given study cycle.

4.     Automatic withdrawal penalties are not justified, particularly when a project otherwise qualifies for penalty-free withdrawal

At the August 30^th PAC, MISO clarified that it intends to apply automatic withdrawal penalties to all withdrawing ICs, including those who otherwise qualify for penalty-free withdrawal under the new, more stringent eligibility criteria. Clearway reiterates its categorial opposition to automatic withdrawal penalties. Such penalties bear no relationship to a calculation of actual harm experienced by other ICs in a DPP cycle and, therefore, are unjust and unreasonable insofar as they violate principles of cost causation that underpin FERC-jurisdictional rates. Nor are MISO’s assertions that any project can trigger loop flows on the system credible. MISO seeks effectively to penalize any new generation project for having an impact, such as changing system power flows, and irrespective of whether those flows increase or decrease. "Harm” and “impact” are not equivalent. Projects should only face withdrawal penalties where MISO can demonstrate that the withdrawing project harms other projects in the queue, and consistent with a clearly defined methodology for MISO to calculate that harm.

Apart from this concern, MISO has not sufficiently explained why it is just and reasonable to assess an automatic withdrawal penalty even on projects that otherwise qualify for penalty-free withdrawal under MISO’s proposed more stringent eligibility rules. If the premise of penalty-free withdrawal is to hold ICs harmless against dramatic, unforeseeable increases in interconnection costs, it is unreasonably punitive to assess an automatic withdrawal penalty even when such “black swan” cost increases occur.

5.     MISO should accept surety bonds as a form of security for milestone payments

Clearway agrees with AES that MISO should accept surety bonds as security for milestone payments. The market for surety bonds has evolved significantly over the last few years such that these financial instruments are in many cases comparable to letters of credit in terms of both a demonstration of financial commitment by ICs and, from the perspective of the oblige (the party protected by the bond), responsive payment terms and liquidity backed by highly creditworthy institutions. Additionally, other RTOs/ISOs, including CAISO, NYISO, and SPP all accept surety bonds to securitize at least some cost allocations in the interconnection study process. Given MISO’s proposal to significantly increase the M2, M3, and M4 milestone payment amounts, surety bonds represent an important option for ICs to satisfy their milestone payment obligations.

6.     MISO should consider incorporating into its proposal common themes raised by stakeholders that could meaningfully improve certainty for ICs seeking to enter the queue

Finally, Clearway believes there are a few common themes raised by stakeholders in the August 9^th comments and subsequent meetings that merit MISO’s consideration, such as:

• Introducing pre-queue transparency and process enhancements
• Providing more clarity around MISO’s harm calculation to help ICs better assess the risks of entering and remaining in the queue
• Providing feedback on POI viability to ICs through pre-queue coordination among MISO, Transmission Owners and ICs

Clearway encourages MISO to consider adopting these and other common themes raised by various proposals from stakeholders.

ENGIE North America, Inc. (“ENGIE) appreciates the opportunity to submit these comments in response to MISO ’s proposal for interconnection queue reform as updated at the August 30, 2023, Planning Advisory Committee meeting. We appreciate MISO’s willingness to consider modifications to the original proposal and to allow more opportunity for stakeholder input.

 ENGIE remains very concerned with MISO’s proposal for queue reform that is still solely focused on increasing cost and risk to generators. The proposed site control requirements which are infeasible paired with the MW queue cap and penalty free withdrawal provisions that remove existing transparency and certainty from the interconnection process, increase risk to interconnection customers to unmanageable levels.

ENGIE is concerned that MISO is striking the wrong balance which will result in decreased competition and not enough generation projects moving forward to meet clean energy transition goals and to provide the customers access to cheaper, cleaner sources of electricity. If MISO’s goal is to keep some projects from entering the queue, this could certainly achieve that goal but will not result in commercially viable projects entering and completing the interconnection process. The reality is that projects must enter the queue to obtain the information needed to make investment decisions and developers will submit more projects on the front end than will ultimately be built. This challenge can be mitigated somewhat through reasonable reforms to milestone payments, site control and other factors but it should be expected that the front-end volume of interconnection requests will be high in a competitive market where there is high demand for renewable energy. MISO therefore should include other holistic reforms to its interconnection process that include improving its internal processes to better support larger queue volumes as recommended by other interconnection customers in prior comments. MISO should first consider FERC Order No. 2023 (“Final Rule”)  as the baseline to interconnection reforms before proposing modifications.  

ENGIE raises the following concerns and recommendations 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 $10,000 /MW with a corresponding change to M3 and M4

• M3 = The greater of (20% of Network Upgrades – M2) or $1,000 /MW
• M4 = The greater of (30% of Network Upgrades – M3- M2) or $1,000 /MW

ENGIE is not opposed to increased financial commitments for interconnection customers to enter the queue, but the magnitude of the increase proposed by MISO is still too large and could be a barrier to entry for viable projects. ENGIE recommends consistent with comments submitted by other interconnection customers, that the M2 payment be increased in the range of $6K to $8K in line with other ISO/RTOs practices. As an alternative, MISO could also consider tiering the increase in milestone payments based on the volume of MWs submitted by the company into the interconnection queue. This could apply in lieu of any type of MW cap.

Increase Point of Interconnection (POI) site control requirements

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

• 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’s proposal to increase site control is still infeasible for interconnection customers even with MISO’s proposed modifications.  Interconnection customers still cannot achieve 50% site control from generator site to POI and 50% of IC switchyard prior to Phase 2 without TO engagement to confirm the location. As noted in prior comments by ENGIE and other interconnection customers, achieving these increased site control requirements is highly dependent on factors outside of a generator developers' control. Interconnection customers do not have all the information they need prior to Phase 2 cycle results to make an informed investment decision. MISO would in effect require interconnection customers to take random options on land that may or may not work since prior to Phase 2 the TOs (Transmission Owners) are not engaged and are not likely to take the time to review a potential switchyard location. Requiring 50% of the IC switchyard also does not align with commercial reality as that land is most likely from the same landowner. Obtaining 50% rather than 100% of the land for the IC switchyard would not be standard practice or even realistic.

ENGIE recommends the following to enhance site control requirements:

• Adopt the first proposed site control requirement of meeting 50% site control from generator site to POI upon application with the option to supply the proposed deposit in lieu. This exceeds FERC’s recent rule on site control included in Final Rule 2023 of 90% site control of the land required for the generation site, is consistent with SPP’s requirements and exceeds MISO’s current policy.
• Drop the second requirement to meet 50% site control from generator site to POI and 50% of IC switchyard prior to Phase 2 for reasons described above. If the requirement is to remain, interconnection customers should be able to supply a deposit in lieu of meeting the requirement. Interconnection customers must also be able to withdraw from the queue penalty free if the POI is moved by the TO or MISO.
• Modify the third requirement to obtain 100% site control from generator to POI, including IC switchyard to allow interconnection customers to meet the requirement within six months of agreement execution rather than requiring an approved exception. The MISO will receive many requests for exceptions in meeting these proposed site control requirements prior to GIA execution. It will be less administratively burdensome for MISO and interconnection customers to have clear guidelines that allow for a level playing field.

Withdrawal Penalties

 MISO’s proposal – Automatic withdrawal penalties

• 25% of M2 at DP1
• 50% of M2 at DP2
• 75% of M2 during Phase 3,
• 100% of M2 during GIA negotiations and beyond

ENGIE appreciates MISO cutting the prior proposed withdrawal penalty prior to DPP start. MISO should also abandon the proposed automatic withdrawal penalties for later study phases. It is not reasonable to assess penalties on projects that cause no harm to other projects in the DPP cycle or earlier queued projects.

 ENGIE recommends that MISO adopt withdrawal penalties consistent with the Final Rule which applies penalties based on a percentage of study costs for the first cluster study and on increasing percentages of network upgrade costs as the customer moves through the interconnection process. The Final Rule established withdrawal penalties that increase as customers continue through the interconnection process, which ensures that customers continue to evaluate the commercial viability of their proposed projects throughout the process and should reduce the likelihood of late-stage withdrawals. The Final Rule also specifies how withdrawal penalty funds should be distributed.

 Penalty Free Withdrawal

MISO’s proposal – Penalty free withdrawal for greatest outliers in costs

Penalty free withdrawal should only apply to the greatest outliers in cost (top 10-25% of all projects in a cycle); all other projects should be subject to a harm calculation to determine potential increase in Network Upgrades on other projects

• Penalty free withdrawal provisions should continue to exist, but need to be simplified and limited
• Will only apply between Phase 1 and Phase 2, and again between Phase 2 and Phase 3
  • Combined NU + AS cost increased by 50% from P1 and P2
  • Combined NU + AS cost increased by 40% from P2 and P3

ENGIE continues to support uniform penalty free withdrawal penalties applied to all projects. Penalty free withdrawal should not simply apply to the greatest outlier as other projects may face impactful, unforeseen cost increases albeit on a smaller scale. As noted in prior comments, this inconsistent application of penalty free withdrawal only to the largest outliers would be unpredictable and uncertain and could cause some projects to be not financeable. MISO’s proposal would unduly penalize projects that may otherwise make a rational business decision to withdraw from the queue. This will not result in more commercially viable projects completing the interconnection process. The Final Rule also specifies uniform application of penalty free withdrawal provisions. The Commission provided that interconnection customers will not have to pay a withdrawal penalty if:

 (1) The customer withdraws its interconnection request after receiving the most recent cluster study report and Network Upgrade costs assigned to the customer’s interconnection request have increased 25% compared to the earlier cluster study report;

(2) The customer withdraws its interconnection request after receiving the individual facilities study report and the Network Upgrade costs assigned to the customer’s request have increased by more than 100% compared to costs shown in the cluster study report; or

(3) Withdrawal does not have a material impact on the cost or timing of other interconnection requests at an equal or lower position in the queue.

 ENGIE recommends that MISO adopt the penalty free withdrawal provisions as outlined in the Final Rule.

MW Caps

 MISO’s proposal – Set MW caps on applications by GI region

• Limit on MW size of requests is proposed as a function of the peak load in each study region
• Proposed percentage will be based on the factors below:
• The limit will be based on but not limited to the following factors: the ability to develop a reasonable dispatch based on the existing system and Generation Facilities in that queue cycle, the regional and subregional peak load in the study model, and anticipated level of project withdrawals.
• Annual peak number (by GI region) to be posted on MISO public website.
• Projects submitted after the cap is met will be used to replace projects in the cycle that are withdrawn during validation process (e.g., site control review), all others will be in next cycle
• A safety value to allow projects with a PPA in the cycle if above the cap

 ENGIE appreciates MISO’s elimination of the company MW cap but the proposal for an overall queue cap must also be eliminated. A queue cap will artificially limit commercially viable projects entering the queue and create a panicked situation for interconnection customers to get projects in first. The proposal to allow projects that don’t make it into the first queue cycle to roll over to the next could fill up queue cycles in the future for years, creating more uncertainty. The details provided by MISO for how the queue cap would be created are very ambiguous and it is unclear how interconnection customers would even know which projects would be kicked to the next queue cycle. Whether MISO is creating a cap based on historical information which may not represent current realities or allowing projects to come into the queue and then deciding on a cap (which is even worse), neither option is workable and will mute market signals and competition in the MISO market.

If MISO is to do anything in this regard, it should evaluate adopting SPP’s approach to a soft queue cap where MISO would track the MWs of projects as they come into the queue and then apply a timeframe limit of 10-15 business days to submit additional projects before closing the queue. Regardless, this issue cannot be resolved by October and MISO should allow more time for stakeholder discussion to ensure a clear and transparent process while potentially allowing other queue reform proposals to move forward.

Other changes proposed could be enough to limit the queue and MISO should evaluate how those changes work before proceeding with evaluating a potential queue cap.

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

ENGIE continues to encourage MISO to pursue a more comprehensive approach to queue reform that includes a balance of increased cost and risks to developers with reforms to study processes and other internal processes that could help manage larger queue volumes more effectively moving forward.

Please see attached comments from Clean Grid Alliance on MISO revised queue reform proposal presented at the August 30th Planning Advisory Committee. 

The TDU Sector is supportive of continued efforts to make MISO’s queue process more efficient and workable for all parties involved.  The sector offers the following feedback in response to MISO’s updated reform proposal:

• The sector believes it is more important for MISO to get reforms right than to get them filed with FERC fast.  MISO should take additional time to think through proposed reforms further with stakeholders.
• Approximately 90% of load in the MISO footprint is served by utilities with an obligation to serve customers reliably.  With MISO’s proposal to cap the number of applications that can be submitted in a cycle, there must be a provision to ensure an application needed to meet an LSE resource adequacy need can be submitted.
• MISO needs to think through the POI site control changes more and overall consider what changes are necessary.
• MISO should also place a focus on how the accuracy and timeliness of study results can improve with reform efforts to help arrive at a balanced set of changes.

The OMS Transmission Planning Work Group (OMS TPWG) appreciates this opportunity to provide feedback on MISO’s proposed interconnection queue reforms. This feedback is from an OMS work group and does not represent a position of the OMS Board of Directors.

OMS has a demonstrated history of supporting sensible reforms to MISO’s interconnection queue processes, and the TPWG agrees that it is appropriate to institute additional reforms now. The current size of MISO’s generation interconnection queue is unmanageable and routinely results in unreliable, outdated, or inaccurate interconnection studies. Given recent federal incentives for the development of new generation resources, the TPWG expects interconnection requests to MISO will continue at the current pace without additional limitations or conditions. As such, the TPWG generally supports increasing milestone payments, automatic withdrawal penalties, and site control requirements in addition to the more detailed feedback below.

Quee-Size Cap

The TPWG broadly supports MISO’s proposal to implement an automatic limitation on the size of the queue per study region. MISO has indicated that that the cap would be a limitation on the total MW size of requests determined as a function of the peak load of each study region. MISO initially suggested a 60% peak load threshold, but now proposes a percentage based on factors that include, but, are not limited to:

-          the ability to develop a reasonable dispatch based on the existing system and Generation Facilities in that queue cycle;

-          the regional and subregional peak load in the study model; and

-          anticipated level of project withdrawals.

To ensure this threshold is transparent and enforceable, the TPWG recommends that MISO include a specific formula or replicable methodology for determining the requisite percentage of peak load that will serve as the annual queue cycle cap or backstop. The TPWG also questions whether MISO’s proposed Tariff redline under 4.1.1.4 regarding the “safety valve” exception for projects with PPAs is sufficiently detailed. Given the critical need for greater certainty regarding generation interconnection timelines, these procedures should be designed so that MISO’s Tariff would not be construed as potentially arbitrary or unduly discriminatory.

Queue-Cycle Timelines

If the 2023 queue submission deadline is extended past December, the TPWG requests that MISO clarify when the 2024 queue cycle would open. It may be unclear to stakeholders what queue requirements apply to which project or study group under overlapping study cycle processes.

Collaborative Stakeholder Alternative

The August 30 PAC Materials included a queue reform proposal offered by five companies as an alternative or modification to MISO’s proposal. The TPWG recommends that MISO consider adopting several aspects of the proposal’s pre-queue coordination attributes. It is reasonable that proposed projects performing due diligence, viability checks, or other measures of coordination with the interconnecting transmission owner(s) could receive benefits in eventual queue processing. These efforts should be standardized, documented, and verifiable.

Queue entry transparency is an element in the alternative proposal that is of particular interest to the TPWG. Making POI and other relevant information available may help address any inequities and promote efficiency as compared to current queue functioning. The TPWG would suggest MISO examine these transparency and other pre-queue improvements and we look forward to hearing more about this proposal at the next PAC.

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. We agree that some changes can help to ensure a workable IQ process where projects entering the queue are likely to complete the process and interconnect to the grid. Regardless, we remain concerned that MISO’s proposed process changes may prove inadequate to manage the throughput needed to meet the new generation planned by MISO’s utility members and states seeking to shift to clean, low-cost energy resources and may also be overly restrictive to developers seeking access to the queue process.  

Overall, we maintain support for the goals related to interconnection reform stated in our feedback submitted 8/11/2023, that MISO: 

1. Reopen the 2023 Queue Cycle quickly
2. Provide an IQ process that limits speculative projects entering the queue while attracting projects that are ready to move forward
3. Provide an IQ process that meets the needs of MISO members and states
4. Provide an IQ process that meets the needs of the MISO system
5. Provide an IQ process that meets FERC standards

There is alignment between these goals and MISO’s stated goals for process reform. And we appreciate MISO’s efforts to be responsive to stakeholder feedback regarding its original Interconnection Queue reform proposal. But we continue to have concerns that MISO’s proposal falls short of appropriate, equitable reforms that will achieve these goals. In the spirit of collaborating on workable solutions and being cognizant of the full scope of dynamics influencing this effort, including FERC’s Order 2023, we offer the following comments.  

Urgency of Reforms

We continue to support near-term reforms even as we recognize the need for a longer-term, more deliberative process to identify workable, holistic solutions that MISO alluded to in comments during the August 30th PAC presentation on GIP Reform. The process for the current set of reforms has been a challenge due to the need for reforms in advance of the 2023 DPP cycle and, therefore, the short timespan allocated to the effort. A tariff filing in the near term which allows for a 2023 and a 2024 cycle is necessary to handle the queue backlog and allow utilities to move forward with near-term resource development. 

However, a longer-term reform effort should formally be incorporated into the work plan of the PAC, PSC, or IPWG and discussed along with Order 2023 compliance changes to ensure that MISO’s interconnection process ultimately meets the goals articulated above, complies with FERC’s new requirements, and ensures an equitable and robust market for new generating resource is maintained across the MISO system. 

Pre-Queue Diligence

As a number of stakeholders have pointed out, all projects are speculative when entering the queue because a project’s full costs are not known until necessary system upgrade costs are determined through the queue process. More and better information up-front is going to reduce the speculative nature of every project. Improving pre-queue diligence should be the first place we look to improve the efficiency of the queue process. We support calls for improved pre-queue due diligence suggested in the adhoc stakeholder group proposal consisting of increased coordination of ICs and TOs in establishing POI viability criteria and providing a standardized and accountable inquiry form for ICs to supplement pre-queue calls. 

MISO’s POI tool is helpful but falls short of providing the information necessary for potential IC customers to make an informed decision about project viability prior to entering the queue. We encourage MISO to commit to developing improvements to that tool that provide ICs with more accurate and expansive information before they submit an interconnection request. For example, the POI tool does not include local planning criteria that may impact a project’s ability to successfully make it through the queue, nor does it contain information about other projects that have already entered the current queue cycle, or projects in cycles that have not yet reached Phase 3. Any one of these can change results significantly. Ensuring the information provided through the PIO tool is as up-to-date as possible is also critical to the utility of this tool.  

Withdrawal Penalties

The Environmental Sector does not support withdrawal penalties for IC’s withdrawing from the queue due to significant cost increases beyond their control or in response to new/unforeseen requirements imposed on projects by either MISO or TOs. For example, ICs should not be penalized when a POI is changed by MISO or a TO, especially after they have been required to secure a percentage Right of Way (ROW) for their proposed POI at the beginning of a cycle. Securing a new ROW for the new POI is a significant unforeseen burden for the IC that could effectively undermine the economics of a project or render it impossible to complete, and the IC should be allowed the opportunity to withdraw the project without penalty in this case. 

It is also important to ensure that any withdrawal penalties actually minimize the harm to other ICs. The current proposal for automatic withdrawal penalties at DP1 may create a perverse incentive for IC’s that would typically find it prudent to drop out after receiving the results of DP1 to stay in the process, avoid the withdrawal penalty, and hope that other projects drop out and change their fortunes in DP2. Larger developers with more financial flexibility may find this tactic particularly advantageous. To avoid this market gamesmanship and ensure a level playing field where projects can receive robust information on project viability before facing significant financial risk, the provision to charge an IC with an automatic penalty of 25% of M2 payment at DP1 should be removed. 

We are also concerned that MISO’s proposal for automatic penalties may be in conflict with Order 2023: 

Paragraph 784 states: We adopt the NOPR proposal that the interconnection customer will also be exempt from paying a withdrawal penalty if (1) the interconnection customer withdraws its interconnection request after receiving the most recent cluster study report and the network upgrade costs assigned to the interconnection customer’s request have increased 25% compared to the previous cluster study report, or (2) the interconnection customer withdraws its interconnection request after receiving the individual facilities study report and the network upgrade costs assigned to the interconnection customer’s request have increased by more than 100% compared to costs identified in the cluster study report. 

MISO’s proposal to apply an automatic withdrawal penalty below a threshold of a 50% cost increase of network upgrades and affected systems costs between Phase 1 and Phase 2, and below a 40% increase from Phase 2 and Phase 3 seems contrary to these Order 2023 provisions. We request that MISO clarify how this is aligned with Order 2023, and how their definition of harm allows for this provision.   

MW Cap

As we expressed in our August 11th comments, we have significant concerns about the application of a MW-based cap on overall queue size. If MISO maintains a MW cap in its proposal, it must (1) be clear and consistent about how the cap will be established, and (2) ensure that the cap is a true "backstop" that is as large as reasonably possible given modeling constraints.

Regarding the need for clarity and consistency, MISO’s proposal to cap MWs per cycle based on its “the ability to develop a reasonable dispatch based on the existing system and Generation Facilities in that queue cycle, the regional and subregional peak load in the study model, and anticipated level of project withdrawals” is ambiguous and needs more definition and guard rails. We believe it pertains to the relationship between peak load in study models, generation in queue and anticipated withdrawals from the queue. But MISO offers no explanation of a method or criteria for determining a ‘reasonable dispatch’ taking these factors into account. This should be clarified so that a cap is not applied at a level which is arbitrary, or unreasonably low, prohibiting the procurement of resources to meet reserve margins, and utility plans in future years. 

We are also concerned that the administration of a pure MW cap (without caps for individual developers) may favor large firms and create an environment where competition and innovation in project financing and execution may be limited throughout MISO. To provide flexibility in the application of any MW cap, MISO should implement this reform on a provisional basis and monitor the impacts while simultaneously seeking to improve modeling processes and tools to adjust generation dispatch assumptions for interconnection studies so that they allow for the kind of export levels that would be expected in a high renewable future. 

Conclusion

The Environmental Sector requests that MISO work quickly with stakeholders to make further modifications to its proposal (including the pre-queue diligence, modifications to the automatic withdrawal penalties, and clarification on the MW cap) and commit to further discussions on longer term reforms to MISO’s GIP. We are eager for a balanced reform package that is in line with Order 2023 requirements and allows for a 2023 queue cycle to begin as soon as possible. 

AES Clean Energy (AES CE) appreciates the opportunity to provide feedback on MISO’s Generator Interconnection Queue Improvement Proposals. While AES CE is sensitive to the urgent need for reforms, it is concerned that some proposals will not have sufficient time for stakeholder engagement and time to consider whether the proposal is the most effective way to manage queue volumes, and whether its adoption of queue caps may have unintended consequences that could lead to future reliability and resource inadequacy risks and may result in projects being excluded from the queue that are more ready to be built and more beneficial to customers. AES CE continues to recommend that MISO move forward with its proposed changes to milestone payments, site control, and penalty free withdrawal provisions after further modifications to the proposals as suggested below in October and continue to engage with stakeholders through a longer initiative around best strategies- which should include process improvements, increased interconnection cost and data transparency, and investment in technological solutions at MISO- to manage the greater queue volume. The proposed reforms are primarily focused on increasing the cost and risk to interconnection customers to participate in the queue. MISO should consider a longer-term initiative to offer faster queue processing using advanced modeling technology and increased certainty in cost and schedule in return.

Changes in Milestone Payments

AES Clean Energy appreciates MISO’s consideration of stakeholder feedback and the reduction of M2 from $12,000/MW to $10,000/MW. However, AES CE continues to believe that MISO has not sufficiently justified such a significant increase in M2.

M2 should reflect a project’s willingness to finance Phase 1 network upgrades. Looking at the data provided by Charles River, the distribution of assigned network upgrade costs at each phase shows the data distribution is heavily skewed to the right (since the mean is above the median), and thus the mean is not the most representative data point to look at. AES CE believes that MISO should use the median network upgrade data on slide sixteen, which shows that the median network upgrade cost per MW is around $80,000, to base its proposed M2 increase. Ten percent of $80,000 would be $8,000 per MW. AES CE believes that MISO should lower the M2 to $8,000/MW as more representative of the network upgrade costs that most projects would be assigned after Phase 1.

AES CE continues to oppose the increase to M3 and M4 milestones. The Charles Rivers Associates waterfall charts on slide seven demonstrate that MISO’s current process is already incentivizing earlier withdrawal of less viable projects, and MISO’s automatic penalties for withdrawal should also continue to ensure that less viable projects withdrawal sooner in the process without the need to post even higher security.

AES CE is disappointed that MISO did not adopt its proposal to allow interconnection customers to utilize surety bonds or guarantees to post milestone payments, and request that MISO reconsider this decision or provide additional justification supporting this decision, please see our prior comments for further details on why we think surety bonds could be utilized to post security. At the very least, AES CE would also like MISO to consider a letter of credit backed by surety bonds as this will not change administratively on the MISO side. There is precedence for this in other markets as this option has been utilized by AES CE in SPP and some WECC TOs.

Site Control Proposal

AES CE does support the scaling of site control as projects advance in the queue to ensure that they remain physically able to connect their generating facility to the POI. However, AES CE opposes MISO’s specific proposal and recommends the following modifications:

1)     At time of application- 25% of gen-tie land or $40,000/mile deposit in lieu.

2)     To enter Phase 2- 50% of gen-tie land or an additional $40,000/mile deposit in lieu

3)     To enter Phase 3- 75% of gen-tie land and 50% switch yard if required

4)     95% site control within 180 days of GIA execution

As noted by multiple stakeholders, POIs cannot be fully locked in before applications, and most transmission owners do not have the staff or time to vet or respond to interconnection customers’ requests in advance of their application. MISO’s proposal offers no mechanism to incentivize transmission owners to perform the necessary preliminary studies, support information requests, and participate in pre-application meetings with interconnection customers to determine the best project POI. Allowing customers to utilize the deposit in lieu option up until the end of Phase 2, would ensure that if any changes are necessary to the POI, customers have the flexibility to modify their site control plans. It would also ensure that customers have sufficient time to undergo any regulatory processes that might be necessary to acquire easements on public, tribal, or utility right of ways. Additionally, by scaling the level of site control or deposit in lieu at each Phase further demonstrates an interconnection customer’s investment in their project and provide incentives for projects without a viable path to their proposed POI to withdraw sooner in the process than exists today. Finally, 95% site control within 180 days of GIA execution would provide customers with enough margin to account for any unforeseen circumstances that may jeopardize or complicate their site control, i.e., a landowner suddenly passing away.

While AES CE does not support MISO moving forward with its current proposal, if MISO does move forward with its proposal it should address in its tariff what will happen with the $80,000/mile deposit in lieu if an interconnection customer achieves 50% of the gen-tie land (i.e. that it will be refunded to the customer), and what it will do with any deposits if the project withdrawals (will this also be returned to the customer, or if forfeited what will MISO do with the collected funds). If MISO does not consider AES CE’s revised site control proposal, it should at the very least allow customers to utilize the deposit in lieu of option if it can provide documentation of the regulatory limitations preventing it from securing the necessary site control continuing into Phase 2 as currently specified in Section 7.2.1.2 of the tariff.

Penalty Free Withdrawal Provisions

AES CE appreciates the additional clarity that MISO staff provided at the August PAC meeting. AES CE supports MISO dropping the 10% automatic penalty if withdrawn before DPP 1 and believes that this will better incentivize projects that may learn through the scooping meetings or other early validation work that their project is not viable to withdraw from the queue and not waste additional MISO resources.

Reviewing the proposed tariff redlines, Section 7.6.2.4 has confusing references to the top 10-25% of projects as being eligible for penalty free withdrawal. MISO should remove any references to the “estimate outliners” i.e., highest 25%, and should simply update the thresholds to the proposed % increases outlined on slide eight of MISO’s presentation. References to the estimate outliners seems to imply there are additional thresholds that projects have to meet to be eligible, and MISO should remove this confusion by simply outlining the specific cost increase metrics projects will have to hit to achieve eligibility for penalty free withdrawal.

Section 7.8.1 describes the allocation of any collected penalties that will be used for. This language should be expanded to consider what happens if all of the study costs are covered, what with MISO do with any remaining funds? AES CE recommends that any remaining funds be used to offset Network Upgrades for the remaining clustered projects or returned to withdrawn interconnection customers on a pro rata basis.

Queue Cap Proposal

AES CE continues to have strong reservations that an overall queue cap with a first come, first served method of subscribing projects under the cap is the most effective proposal to manage queue volumes. AES CE believes that MISO should not move forward with a queue cap proposal at this time and should move forward with changes to the other requirements and evaluate their effectiveness at limiting less ready projects from entering the queue. MISO should also continue to invest in resources and explore processes and technological improvements that would enable it to handle an increase volume of projects. If MISO is still unable to handle the volume of projects or continues to see a higher number of less ready projects enter the queue, then stakeholders could revisit proposals to cap the queue.

In our last comments, AES CE had raised a number of data points that MISO should consider when evaluating where to set a potential queue cap. Rather than providing this data analysis for stakeholders to consider, MISO simply modified the proposal and the tariff to say that future queue caps “limit will be based on but not limited to the following factors: the ability to develop a reasonable dispatch based on the existing system and Generation Facilities in that queue cycle, the regional and subregional peak load in the study model, and anticipated level of project withdrawals.  This value for each GIP cycle will be posted on the MISO public website prior to the start of a given GIP cycle,” (Section 4.1.1, pg. 70), and will be further outlined in the BPMs. AES CE is very uncomfortable that in this latest iteration, MISO has not provided stakeholders what the potential 2023 cycle cap would be to evaluate MISO’s methodology.

AES CE also believes that the current tariff language gives MISO too much arbitrary power to raise or lower the cap without input from stakeholders. When asked during the PAC meeting whether MISO would consider a dispute or vetting process to allow stakeholders to provide input on the annual cap that can fluctuate under the proposed tariff language, MISO staff simply said “no” without further explanation or justification. If MISO moves forward with this proposal, it should absolutely provide stakeholders with a commenting period to verify and provide input on MISO’s proposed annual queue cap. AES CE also believes that MISO should adopt a specific floor that the annual queue cap could not fall below- such as 60% of load regional/subregional load model utilized in the MTEP studies, and then MISO could use the methodology proposed above to determine if a higher volume of projects is warranted based on expected future resource adequacy needs.

If MISO moves forward with the queue cap proposal, it should better define the quality of PPA that would enable projects to enter the queue above the cap. Section 4.1.1.4, states that customers with “long-term PPA” will be allowed to proceed, however, MISO should more explicitly define what is meant by “long-term”, such as a PPA with a minimum 10-year term length. PPAs with non-LSEs should also be allowed to count for this requirement. Since interconnection customers are responsible for cover their network upgrades, off-take agreements with non-LSEs should be allowed to proceed to the queue because it also provides evidence that the project is “real” and is more ready than projects without a PPA. AES CE would also support MISO considering other markers of readiness that would enable the project to enter the queue above the cap, such as purchase of long-lead time equipment like transformers, or being short-listed in an RFP, etc.

AES CE remains concerned that MISO application systems will not be robust enough to handle the large volume of projects being submitted as soon as the window opens and should not move forward with a queue cap until it has made the necessary improvements to its technology to handle this situation. Additionally, AES CE is concerned that the first come model will lead to lower quality applications, and while Interconnection customers should still be given the 10-day cure period to fix any modeling or application errors, this could create more work for MISO than if interconnection customers weren’t under as much pressure during the queue window to submit all their projects as fast as possible.

Finally, AES CE opposes any restrictions on transfers between interconnection customers and recommends that MISO delete “This transfer must occur after the end of Decision Point II of the Definitive Planning Phase” in Section 4.3 of the tariff redlines.

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. 

Significant comments were submitted on August 9, 2023 addressing several aspects of MISO’s queue reform proposal. Nothing at the August 30, 2023 Planning Advisory Committee meeting changed the G&T’s perspective on those comments, thus all of them are still valid.  MISO’s further explanation of the capped study sizes does lead to further concerns and are the focus of these comments.

Overview of Study Cap Issue

MISO proposes a cap on the size of the queue per region as part of an overall package of upgrades.  This has been pitched as a backstop for the other changes just to keep study sizes manageable.  MISO has adequately described the need for such a backstop.  The details provided so far around executing the study cap could undo the improvements from the rest of the package and leave us worse off than we are now.

After reviewing the entirety of MISO’s proposal, what we see with the cap is something like this:

1)      Higher financial risk on IC’s to eliminate non-ready projects

2)      Capped study queue clusters in case the queue isn’t winnowed down enough

3)      Cluster filled by projects taking on that financial risk in a first-come, first-served manner

This approach provides the following risk to load-serving entities:

• IC’s with high risk tolerance can flood the queue again favoring large organizations with deep pockets and putting cooperatives at a disadvantage
• This drives out other, more ready, potentially more economical projects from other developers who happened to get their requests in milliseconds too late
• Those larger developers can then accept the withdrawal penalties for some of their projects and factor those penalties into PPA’s from the projects that proceed
• With competition “boxed out” of the queue, load faces higher prices from a smaller number of IC’s

A Better Approach

Accepting for purposes of these comments that the cap is justified, and that the goal of the queue is to move ready projects to operation rather than to financially penalize unready projects, MISO should score the projects on a handful of auditable readiness measures and fill the clusters with the best scoring projects, irrespective of the time stamp on the submittal.  The excluded projects in one cluster would then have time to improve their score before the next window closes, withdraw, or stand pat hoping they make the cut the next time.

Here is a straw proposal to get the conversation started.

Automatically in the cluster:

• Increase at an existing facility
• Having an offtake contract

Ranked based on Pre Queue Tool Results

MISO does a process improvement to link the pre queue tool to the MTEP Cost Estimation guide.  MISO further updates the models with line lengths.  Then, each project is run through the pre-queue tool and given a rough cost estimate as if all overloaded facilities must be paralleled.  The cost of the new facility is estimated from the linkage to the MTEP Cost Estimation Guide, and the projects with the lowest upgrade costs are put in the cluster first.  Special consideration could be given to projects that submit the pre queue tool data over those that did not, demonstrating that the developer acknowledges the estimated costs.

 The above list prioritizes projects most likely to progress, awards developers who utilize tools available to them for prep work, and further rewards those projects which pick spots with few upgrades predicted from the pre-queue tool.

On the other hand, it keeps projects from developers who do not utilize the pre-queue tools and/or pick locations already heavily constrained from bogging down the cluster studies if there are other projects in better locations.  This idea borrows heavily from screening techniques that PJM has adopted.

This approach would require process improvement on the pre-queue tools, which seemed to have widespread support at the last two PAC meetings.

Details would need to be worked out on the offtake agreement, although the discussions around that idea showed semantic division on what is an offtake agreement rather than disputing that a project with an off taker is infinitely more likely to proceed than one without.  This could be as simple as a transparent method for a Market Participant for network load in MISO “sponsoring” the request.

Xcel Energy supports these proposed queue reforms as an important and necessary step to ameliorate the MISO Interconnection Queue issues that are well-known across the industry and as detailed within the Charles River Associates report.

We do ask for small process changes to increase transparency for Interconnection Customers and all stakeholders on the impact of new generation on the Transmission System. Currently, MISO produces a Report at the conclusion of the Definitive Planning process phases which includes a list of overloaded transmission facilities that are required to be upgraded following contingencies where the DFAX is 20% and above. We request that MISO include a spreadsheet with DPP Study Reports showing all overloaded transmission facilities regardless of the DFAX.  The list does not need to be detailed in the report, a spreadsheet will be sufficient. This additional information can better inform ICs and potential buyers of those projects, of the transmission topology and capacity at various POIs.

Additionally, we request that MISO consider changing the dispatch model in System Impact Studies to more accurately capture the expected congestion costs, which are born by the retail customers and create inefficiencies in the MISO market. Currently, all existing generation is turned off in order to model the new generation in the study, with existing generation only being 'turned on' to meet load needs. Thus, a new wind farm with an interconnection request on the same bus as other existing wind farms can appear to have ample transmission available, but when that new wind farm is operational it might be frequently curtailed (along with the existing wind resources on the same bus) due to transmission constraints.

We recommend that new and existing generation of similar types, located in similar locations, be dispatched at similar levels, to ensure existing and new resources maintain their deliverability and future congestion is avoided.

Arevon supports the Clean Grid Alliance’s feedback on the changes to MISO’s Generator Interconnection Queue Improvement proposal presented at the August 30, 2023 PAC.  In addition to that feedback, Arevon offers the following specific thoughts on some of MISO’s changes.  (Arevon’s silence on any specific provisions in, or other changes to, MISO’s proposal should not be construed as support for them.)

1.  Change to the overall cycle cap:  MISO continues to insist on an overall cap without knowing if, in light of the other participation-dampening aspects of its proposal, one will be needed.  The introduction of an overall cycle cap may be more harmful than helpful.  Limits on competition shouldn’t be introduced without a proven need for them.  The replacement of a prescriptive cap (% of peak load) with a non-exhaustive list of factors MISO will consider in establishing each cycle’s cap gives MISO far too much discretion to limit competition. 

2.  Removal of per-developer cap:  If there continues to be an overall cap on the number of MW allowed in each queue cycle, MISO needs to put something in place to ensure that each cycle isn’t dominated by only a few developers.  (The table on page 8 of Charles River Associates’ updated analysis demonstrates that, in the 2017 – 2020 cycles, a few companies have submitted, and withdrawn, a disproportionate share of the MW in the cycle.)  To ensure that all developers have a reasonable opportunity to participate, Arevon believes that MISO should implement the following process for accepting submissions into each cycle.

Rather than closing the submission window once the overall cap has been met, MISO should allow interconnection requests to be made until the deadline has passed.  After the deadline, MISO should add submissions to the current cycle in the order they were received until the cap is exceeded; except, only one submission per participating developer should be added unless and until every participating developer has had a submission added.  If every participating developer has had one submission added before the cap has been exceeded, MISO should repeat the process until the cap has been exceeded.

3.  Establishment of the Network Upgrade and Affected Systems cost increase triggers of Penalty Free withdrawal:  MISO hasn’t justified any change to the Penalty Free Withdrawal cost increase triggers, let alone the specific changes it wants to make.  The magnitude of cost increases rather than the percentage of projects affected, no matter when the increases occur, should continue to drive the establishment of these triggers.  (Arevon recognizes that MISO’s proposal doesn’t include a “% of projects” trigger; but, the % increases were developed to make 10-25% of projects eligible).  MISO has failed to demonstrate the propriety of doubling the allowable impact before PFW is triggered and elimination of the P1 to P3 cost increase trigger.  In fact, MISO should add a P3 to GIA execution trigger.  (Late-stage cost increases have become a reality.  Developers shouldn’t be penalized for withdrawal due to substantial cost increases no matter when those cost increases become known.

 4.  Change to milestone payments:  MISO has failed to justify any increase in M2, let alone from $4,000/MW to $10,000/MW.  (As a side note, on slide 6 of MISO’s presentation deck, M4 was specified as being, “The greater of (30% of Network Upgrades – M2) or $1,000 /MW”.  Arevon suspects this is just a typo as M4 is currently “The greater of (30% of Network Upgrades – M2 – M3) or $1,000 /MW”.  In any case, MISO should correct the slide or indicate its intention to change M4.)

 5.  Change to POI Site Control:  In addition to extending the POI site control deadline “GIA Execution or within 180 days of Execution with an approved exception”, MISO needs to provide transparency around the exceptions that will be granted.  Moreover, Arevon believes that MISO should clarify whether “generator to POI” routes can be changed (leaving the location of the generator and the POI unchanged) without triggering Material Modification provisions.

DTE appreciates MISO’s efforts to address the interconnection queue backlog by proposing a set of reforms aimed at reducing the number of speculative projects that enter the queue, many of which are withdrawn prior to reaching an executed GIA.  As MISO prepares to file their proposal with FERC we ask that MISO consider the following:

1)     We recommend that MISO remove the MW cap on the generator interconnection queue from the proposal to provide stakeholders more time to discuss an appropriate approach to limiting the queue size.

Placing a limit on the interconnection queue size could have implications on the pace in which MISO members are able to meet resource adequacy requirements, plant retirement decisions and longer-term generation plans, like integrated resource plans, within their respective states.  We are concerned that establishing an arbitrary cap may incentivize the wrong behaviors, such as MISO employing limited staff to conduct engineering studies to meet the cap as opposed to increasing their capacity to reduce the overall backlog.  DTE believes that increasing the milestone payments and adding withdrawal penalties, as is being proposed, will have a more direct and effective impact on addressing speculative projects than imposing a cap.  This approach should be MISO’s focus, along with maximizing queue throughput to meet the demands of its members decarbonization goals, plans and policies. As an alternative, MISO could assign a higher study priority to projects using the criteria that they have listed on slide 9 of their presentation to the PAC on 8/30/23 (20230830 PAC Item 08 MISO GI Queue Reform Proposal Update (PAC-2023-1)629991.pdf (misoenergy.org)), while allocating excess resources to study other projects in that queue cycle with a lower priority to ensure the backlog is being addressed.

2)     Provide more detail on how MISO arrived at the 40% and 50% thresholds for the penalty free withdrawal provisions.

MISO intends to reduce the number of projects eligible for penalty free withdrawals so that it would be applied to the greatest outliers.  As indicated on slide 8 of MISO’s presentation to the PAC, this would mean only the top 10-25% of projects within a particular cycle would be eligible for a penalty free withdrawal.  We would like MISO to provide their rationale and support for using an increase of 40% and 50% of combined Network Upgrades and Affected Systems costs as the threshold to accomplish the goal of keeping total amount of projects eligible for penalty free withdrawals to 10-25%.  It is unclear if this is an arbitrary determination and how this approach equates to only the top 10-25% being eligible for penalty free withdrawals. 

We look forward to continuing to engage with MISO on this proposal during the next PAC.   

New Leaf Energy Comments on MISO GI Queue Improvement Proposal  - Feedback on August 30, 2023 PAC Presentation

September 12, 2023

New Leaf Energy, Inc. (“New Leaf”) appreciates the opportunity to provide the following comments on MISO’s Generator Interconnection Queue Improvement proposal presented at the August 30, 2023 PAC meeting. 

New Leaf is an independent developer of energy storage and solar generation with over 12GW of utility-scale solar and storage systems under development across the country. Formerly the development arm of Borrego Solar Systems, New Leaf has also developed and deployed over 1 GW of distribution-interconnected solar and storage resources. New Leaf is a MISO member and interconnection customer and is developing new solar PV and battery storage systems in the MISO footprint that will participate in MISO-administered markets.

It is critical to account for resource ELCC and operational behavior when comparing MISO’s queue size to peak load and identifying an appropriate MW limit. New Leaf agrees with MISO that large queue sizes pose a burden that can contribute to delays and uncertain study results . However, in its proposed MW cap, we find it problematic that MISO continues to compare the nameplate MW capacity of projects in the queue with load (peak or otherwise). This comparison doesn't account for ELCC, differences in capacity factors, and how resources will be dispatched in real time. If MISO does not take these factors into consideration, they will likely set the cap lower than appropriate and could lead to future resource adequacy issues.

Stakeholders would benefit from more details and examples for how MISO will use the proposed factors for determining the MW limit. New Leaf appreciates MISO’s attempt to propose a more formulaic approach to setting the MW limit, as described in the August 30th PAC. However, it is unclear how the three factors actually be used to set the MW limit. In order for stakeholders to provide constructive feedback, MISO should provide illustrative examples of how it plans on using the three factors to set the limit. 

To prevent a “gold rush” scenario that incentivizes more risky queue submissions, projects that fail to meet the MW limit should not be automatically assigned to the next queue. MISO’s time-stamped based approach of admitting projects to the capped queue directly contradicts its stated effort to weed speculative projects from the queue. The rush to submit projects created by this approach puts a queue position at an even greater premium, further encouraging ICs to submit risky projects. This issue is amplified by the proposed policy to assign projects over the queue cap to the next year’s queue, enabling future queues to fill and creating more urgency to “get in line” (if conservatively assuming a base case of 200 GW of submissions to the 2023 queue and a 73 GW cap, DPP 2023, 2024, and 2025 would nearly fill in a single submission period). Projects that do not fall under the cap should be eligible to replace withdrawn projects from that queue but should not be automatically assigned to the following queue. Rather, a fresh submission window and full queue should be opened for each study period. 

New Leaf supports the recommendation for the M2 deposit to reflect median upgrade costs, rather than the average. New Leaf supports the recommendation put forward by Invenergy (both in their written feedback on August 11th and vocalized during the August 30th PAC meeting) that changes to M2 payments should be scaled to median network upgrades per MW rather than the proposed average. The proposed $10,000/MW M2 payment is based on the CRA’s analysis that average Network Upgrades ranged from around $10,000 to $14,000 per MW. New Leaf agrees with Invenergy that a figure based around the median network upgrades would be far more representative of the network upgrades of a typical interconnection customer. CRA estimates that median network upgrades range from around $7,000 to $9,000 per MW. The difference between the median and average ranges strongly suggests that a few outlier projects with large network upgrades are skewing the average, thus making the $10,000 to $14,000 per MW an inappropriate approximation for network upgrades. New Leaf recommends MISO lower the proposed M2 payment from $10,000/MW to $8,000/MW to reflect the middle value of the median cost of network upgrades as calculated by CRA. 

The PPA “safety valve” is counter to a typical development process and could create a perverse incentive to sign contracts before full costs are known. As a means of mitigating the risk of exceeding the MW limit, developers could look to have a PPA signed in order to enter a queue cycle when desired. If developers are forced to enter into contracts before costs are certain, then they would need to incorporate that uncertainty into the power purchase agreement offer, which would drive up the costs of these contracts, resulting in higher consumer costs. Furthermore, the proposal is competitively advantageous to utility-owned projects and potentially discriminatory towards IPPs. Lastly, MISO risks a full rejection of this interconnection reform proposal at FERC given their ruling on a similar provision in their recent interconnection reform NOPR. In Order 2023, FERC declined to adopt the NOPR proposal to allow projects with a signed PPA to be deemed “commercially ready” to enter the queue, in part due to concerns that this, “could incentivize power purchasers in some regions to execute purchase contracts with interconnection customers whose generating facilities will later be determined to be commercially non-viable” (FERC Order 2023, Paragraph 698). New Leaf strongly encourages MISO to remove the PPA “safety valve” from the final reform proposal.  

New Leaf appreciates MISO’s consideration of these comments and we look forward to continued engagement. 

Respectfully,

Adam Stern

Director, Policy and Business Development

New Leaf Energy, Inc. 

astern@newleafenergy.com

978-651-9745

Draft SREA Comments MISO Generator Interconnection Queue Improvements

The Southern Renewable Energy Association (SREA) appreciates the opportunity to provide comments on MISO’s amended Generator Interconnection Queue Improvement proposal and proposed tariff revisions put forth at the 8/30/2023 PAC. While there were minor changes to the proposal, we continue to be concerned with the overall emphasis on the responsibilities of ICs rather than MISO to address queue throughput with an increased queue size. 

We support near term reforms, in addition to more concerted efforts which MISO alluded to in comments during the August 30th PAC presentation on GIP Reform. The process for the current set of reforms has been a challenge due to the short timespan allocated to the effort. It should also be noted that many stakeholders provided written feedback that MISO seemed not to have reviewed before the August 30th PAC, which does not support the statement that ‘Based on extensive stakeholder feedback, MISO is making some minor adjustments on the original package proposed at the July PAC.’ A tariff filing in the near term which allows for a 2023 and 2024 cycle is necessary to handle the queue backlog and allow utilities to move forward with near-term resource acquisition. Longer term reforms should formally be incorporated into the workplan for the PAC, PSC or IPWG for no later than Q1 2024. 

SREA acknowledges the challenge of managing the magnitude of requests currently designated ‘Active’ in the queue, but we maintain that the record-breaking size of the 2022 Queue Cycle is not anomaly and is likely indicative of a longer term trend. MISO should respond proactively, rather than reactively to this trend and commit to more comprehensive process reforms. Both long term and near term reforms should be cognizant of Order 2023 compliance changes to ensure that MISO’s overall interconnection process meets FERC’s new requirements. Increasing the ability to process larger volumes of requests, while ensuring that queue entrants are provided with more information before entering the queue is key to a more efficient queue process that will result in timely execution of GIA’s and in-service projects.  

Pre-Queue Diligence

Reforms to MISO’s Generator Interconnection Process (GIP) are clearly necessary because of insufficient throughput for projects in the queue. However, the blame is not due only to so-called ‘speculative’ projects entering the queue. It’s been pointed out by many stakeholders that all projects are speculative when entering the queue because a project’s full costs are not known until necessary system upgrade costs are determined through the queue study process. Projects themselves are not speculative, the current interconnection process itself is. More transparency and more conclusive information up-front is key to reducing the speculative nature of the process. 

Improving pre-queue diligence should be the first priority in improving the efficiency of the queue process. We support suggestions for pre-queue due diligence suggested in the Collaborative Stakeholder Alternative Queue Reform Proposal’ [1] consisting of increased coordination of ICs and TOs in establishing POI viability criteria, and providing a standardized and accountable inquiry form for ICs to supplement pre-queue calls, as those calls are often not available to ICs. 

MISO’s POI tool is helpful, but we strongly support improvements to that tool which could provide ICs with more accurate information prior to entering the queue. The rough sketch of POI headroom that the tool currently provides does not rise to the task of the necessary pre-queue transparency needed to reduce ‘speculative’ requests on behalf of ICs. Iit also does not include local planning criteria that may impact a project’s ability to successfully make it through the queue. 

Administrative MW Cap

In its current form, MISO’s proposal to cap MWs per cycle is based on a concept of ‘reasonable dispatch.’ This pertains to the relationship between peak load in study models, generation in queue and anticipated withdrawals from the queue. But MISO offers no explanation of a method or criteria for determining what specifically is the ‘reasonable dispatch’ taking these factors into account. For example, MISO must explain how the overall MW cap will account for different capacity values across resource classes and differing dispatch assumptions for ICs requesting ERIS v. NRIS. Otherwise, MISO risks a MW cap that unduly restricts new resource entry.

This should be clarified so that a cap is not applied at a level which is arbitrary, or unreasonably low, prohibiting and prohibits the procurement of resources to meet reserve margins, and utility plans in future years. 

Overall MISO’s proposal for a MW cap as a backstop raises a question about the other reforms MISO has proposed to lower the number of ‘speculative’ projects in queue cycles leading to unreasonable dispatch in queue cycles. If those reforms are not effective, then why institute those reforms in addition to the MW cap? Complicating matters, MISO has been unwilling to commit that the MW cap will ensure MISO’s ability to meet study deadlines. Absent reforms to study processes to increase MISO’s capacity to study more projects in a given year, a MW cap will result in DPP cycles that are fully subscribed for multiple years out, prolonging the time it takes for new resources to interconnect.

SREA also takes issue with the ‘safety valve’ concept involving projects entering the cycle above the MW cap that have PPA’s. If PPA prices change, as a result of increases in interconnection costs, which they are likely to, it could result in these projects withdrawing from the queue and inducing harm. Furthermore, PPAs are primarily available to utilities and can be ‘self-dealt”. For this reason, MISO should not favor utility projects over independent power producer projects. The PPA provision which was intended to identify commercial readiness was not accepted on its own by FERC in Xcel’s queue reform filing and it should not be included here.[2]

Nor does the safety valve achieve MISO’s stated objectives for the MW cap. MISO has premised the “safety valve” as necessary because projects with PPAs demonstrate sufficient due diligence to merit guaranteed entry to a queue cycle. This undermines MISO’s argument for a MW cap as a backstop to ensure a “reasonable dispatch.” Additionally, MISO contends that this “safety valve” will be used infrequently as few projects have PPAs at queue entry. But if the MW cap will result in fully subscribed queues for multiple years out, that creates a strong, perverse incentive for ICs to enter PPAs that necessarily are highly contingent on favorable study results as to provide no meaningful indication of project maturity or due diligence.

We are also concerned that the administration of a MW cap may favor large firms more than others which creates an environment where competition is limited and innovation in project financing and execution may be limited throughout MISO. 

In conclusion, SREA believes strongly that if implemented and proposed to FERC through MISO’s tariff, the MW cap should only be implemented on a provisional basis to manage throughput while longer term reforms are developed and implemented. MISO’s proposal for a MW cap to serve as a backstop should not be used as a workaround for providing longer term reforms that could increase pre queue transparency or improve MISO’s ability to manage dispatch of different resources in the interconnection study process. 

Withdrawal Penalties

The Environmental Sector does not support penalties for IC’s withdrawing from the queue for issues that cannot be known outside of the interconnection study process. In absence of increased pre-queue due diligence, ICs should not be expected to commit to a project when a POI is changed by MISO or a TO, especially after they have been required to secure a percentage Right of Way (ROW) for a POI selected by the IC at the beginning of the cycle. Securing a new ROW for the new POI is a significant unforeseen burden for the IC that could effectively undermine the economics of a project, and the IC should be allowed the opportunity to withdraw the project without penalty in this case. 

We are also concerned that MISO’s proposal for automatic penalties may be in conflict with Order 2023 under Par 783 where FERC states: 

‘We note that a withdrawal could trigger minor adjustments to the study results of the remaining equally- or lower-queued interconnection requests that do not represent a significant harm to those remaining in the queue.  Therefore, we are modifying the NOPR proposal to require the transmission provider to assess a withdrawal penalty only if the withdrawal has a material impact on the cost or timing of any interconnection requests with an equal or lower queue position.  If the transmission provider determines that the impact of the withdrawal is immaterial, the transmission provider must not assess a withdrawal penalty.’ 

Under this standard, we do not think MISO’s proposal for automatic penalties is just and reasonable given that harm calculation could take a significant amount of time to determine whether a withdrawal has caused harm to other participants. It is important overall, to ensure that withdrawal penalties are applied to projects that cause harm to other IC’s in queue clusters. The current proposal for automatic withdrawal penalties however is divorced from this principle by imposing a penalty even when there may be no tangible harm to other ICs. Worse yet, this creates a perverse incentive for IC’s in Phase 1 that would lose 25% of M2 payments at DP1 to stay in the queue longer, potentially increasing harm to the cluster if the project withdraws at a later phase. At the very least, we suggest that if the automatic withdrawal penalties reform is to be kept in MISO’s proposal, the provision to charge an IC with an automatic penalty of 25% of M2 payment at DP1 should be removed.

Meeting Demand

MISO’s Future 2A indicates the need for roughly 13GWs per year to come in service over the next 19 years to add a projected 254GWs of capacity.[4] Given the 2-3 year average timespan currently allocated to MISO interconnection cycles, it is crucial that MISO implement reforms that meet their 373 day timeline. FERC Order 2023’s  elimination of the ‘reasonable efforts standard’ [3] is appropriate to increase accountability for transmission providers, and it incentivizes deeper reforms like those described by many stakeholders. In the event that the proposed reforms are adopted in whole, we request that there is an accountability mechanism or fine for MISO if timelines extend beyond the 373 day period MISO has identified for queue cycles. We also reiterate that it may increase efficiency if there were 2 smaller cycles initiated per year, rather than the current annual cadence.     

Conclusion

SREA urges that MISO approach queue reform by balancing expediency with a recognition that deeper reforms will be necessary to ensure MISO’s interconnection process provides timely, transparent and predictable costs for developers. The next queue cycle should happen as soon as possible, but given the pace needed, there is a trade-off between rough justice and a thorough vetting of options. Modification or elimination of automatic withdrawal penalties and a provisional usage of the MW cap would go a long way towards improving MISO’s short term package, but they could have unintended consequences. Foremost among those consequences is setting a precedent for reactive policy changes that provide limited stakeholder feedback or review of that feedback. This is not helpful for stakeholders, nor is it helpful for MISO’s goals. Longer term, we look forward to earnest discussions on a deeper reform package that addresses efficiency and transparency of the interconnection process, while aligning or exceeding the requirements of Order 2023.

[1] Collaborative Stakeholder Alternative Queue Reform Proposal (Supported by the following MISOmembers: EDF Renewables, Entergy, MPPA, Wolverine, CMPAS) pages 5-6  (https://cdn.misoenergy.org/Collaborative%20Stakeholder%20Alternative%20Queue%20Reform%20Feedback%20August%202023629976.pdf) 

[2] ER23-629-001, at Par. 65, ‘Based on the record in this proceeding, many independent power producers currently use the security in lieu of a commercial readiness demonstration option in PSCo because it is difficult for them to meet the requirements for the other existing commercial readiness demonstration options (i.e., demonstrating that the project has obtained a contract for sale, is included in a resource solicitation plan, or has provisional interconnection service).(1)  These developers also represent that the readiness milestones under the proposed generation deployment option are misaligned with typical development cycles and business practices for independent power producers.(2)’

1. See, e.g., SEIA Protest at 2-5.

2. Id. at 6-10; HQC Solar Protest at 18-19, 24-25; Interwest Protest at 8.

[3] Order 2023, Pars. 962-978 

[4] Managing the Energy Transition, MISO Board of Directors, September 14, 2023, Slide 4 https://cdn.misoenergy.org/20230914%20Board%20of%20Directors%20Item%2009%20Reliability%20Imperative%20Update630169.pdf

     Pine Gate Renewables appreciates the opportunity to provide comments on the updated package and tariff redlines that were presented at the August 30 PAC.  While the process has moved quickly, we appreciate that MISO has taken the time to answer stakeholder questions and scheduling additional meetings to do so.

     Pine Gate supports the comments raised by Clean Grid Alliance (CGA) and the Southeast Renewable Energy Association (SREA), and we’d like to provide feedback on four topics: the removal of the parent company cap, setting the cluster cap, the PPA safety valve, and tariff redline clarifications.

Removing the Parent Company Cap

     Pine Gate is concerned that MISO has removed the parent company cap provisions, as we see the cap as an effective guardrail to mitigate against market power manipulation by preventing a small number of interconnection customers from acquiring a disproportionate amount of capacity within a single interconnection cycle.  MISO has stated that it intends to address the market power issue after-the-fact and, if necessary, impose a parent company cap in subsequent cycles.  However, this does not address the potential market power manipulation issues for the 2023 and 2024 interconnection cycles, given that a waitlist for 2024 will be inevitable. As such, in lieu of a parent company cap, MISO must proactively address this concern and maintain a level playing field for all interconnection customers. 

     Setting an overall cap without including a parent company cap will inherently make queue positions significantly scarcer and more valuable, so companies that have the means will do whatever it takes to secure those spots.  There is substantial precedent in the solar industry for market participants to develop and deploy sophisticated automation tools to instantaneously reserve positions in programs with limited slots.  To prevent a customer from automatically filling the queue, MISO should develop website restrictions (e.g., time limits per IP address) for when the cluster window opens.  We look forward to discussing this and other potential measures at the IPWG.

Setting the Cluster Cap

     MISO is seeking feedback on how to set a MW cap based on reasonable dispatch assumptions. With respect to incorporating prior-queued generation, we recommend that MISO should only include projects that have advanced to Phase 3 in their respective DPP cycles. Limiting the amount of higher-queued generation in this manner will be the only way to establish a credible dispatch scenario to set a MW cap.

PPA Safety Valve

     Pine Gate echoes the concerns raised by CGA and SREA of permitting a “safety valve” for projects with PPAs to enter a cluster above the cap. As we stated in our earlier comments, this safety valve 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 maximum 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.

Tariff Redlines

     Pine Gate is concerned with the language added in Section 7.6.2.4 regarding penalty-free withdrawals.  Specifically, there is language pertaining to Network Upgrade cost estimate outliers that is unnecessary and creates confusion.  First, the language is added to sections that pertain to System Impact Studies and Facilities Studies, which clearly do not pertain to the 2023 and beyond clusters. Second, in the sections that apply to the DPP Phases, the language reads as if interconnection customer must both be in the top 25% of cost increases AND have a cost increase of X%, which is not what MISO is seeking to do.  See the redline language below:

Interconnection customers that represent the top 25% of increases in MISO Network Upgrade costs of twenty-five percent (25%)in a study cycle and can demonstrate a combined Network Upgrade and Affected System cost increase from Phase I to Phase II of at least 50%,

     Since the top 25% was MISO’s intention when setting a percentage increase, and not an actual requirement to qualify for penalty-free withdrawal, that part should be removed.

     Pine Gate would also like to see additional clarification on Section 7.8.1 regarding Use of the Automatic Withdrawal Penalty Payments. MISO intends to use the payments to refund the study costs of projects that execute LGIAs, but what if there are still leftover funds after all the study costs have been refunded? This may likely happen as M2 payments are significantly higher than study costs.  MISO should address this potential outcome.

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

Following up on MISO’s latest queue reform proposals from the August 30^th, 2023 PAC meeting, Savion would like to offer the following additional comments. Savion would like to respond to the following changes proposed by MISO.

• M2 increase from $4k/MW to $10k/MW

-       Savion opposes this proposal.

-       We propose a compromise of $6k/MW.  If MISO increases the M2 milestone to $10k/MW as proposed, it will increase the likelihood of ICs remaining in the study at DP1 as their step-up in financial basis to proceed at DP1 is less than it would be if M2 is $6k/MW.  While a higher M2 has 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 properly incentivize viable projects throughout the study process.

• 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 withdrawal penalties, especially in early study stages, MISO would send the wrong signal to ICs.

-       We believe projects should be eligible to withdraw at Phase 1 decision point without any penalties since an IC gets to see the network upgrade costs and the thermal/voltage results for the first time at this point.

-       MISO’s current recommendation of applying a Withdrawal Penalty at Decision Point 1, combined with the Penalty Free Withdrawal opportunity at Decision Point 2, wrongly incentives ICs to consider “doubling down” in order to later qualify for the Penalty Free Withdrawal. We believe this is another good reason for MISO to eliminate the Withdrawal Penalty until the start of DPP Phase 2. If MISO still recommends to enforce penalties during DPP Phase 1, Savion proposes the following:

MISO only provides the constraints list as part of the pre-screened results. If MISO is introducing penalties for withdrawal at DPP1 stage, then MISO should be held responsible for better results. It can be done as follows:

• Provide NU cost allocation per project as part of the Pre-Screened results.
• At DPP PH1, the cost allocation per project will be compared with the Pre-screened results.
• If the difference between the NU cost allocation per project in the 2 reports is more than 20%, allow the ICs to withdraw without any penalties during DPP Ph1 since the ICs decided to stay in DPP Ph1 based on the Pre-Screened results and made significant financial commitments.
• If the difference is less than 20%, MISO can enforce their penalties.

 This holds MISO and ICs equally responsible for moving through the queue. The prior penalty schedule for DPP Phase 1 is biased and works against the ICs.

• Limit the number of MWs in a queue cycle.

-       Savion strongly supports this proposal. We require MISO to provide clear guidelines on how this will be performed. The tariff language is not clear on this subject at the moment. Savion would request MISO to consider the Staged Application (2-Stage) proposal laid out in our earlier feedback.

• Removal of MW cap per developer.

-       Savion strongly opposes this proposal.

-       This will again result in an inrush of applications and may cause developers to flood the queue and manipulate it. We strongly urge MISO to consider enforcing a cap and follow the 2-step application process which we had laid out in our earlier feedback.

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

-       Savion opposes this proposal. 

-       Savion highly discourages MISO from allowing 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.

-       This will also flood subsequent cycles and does not sound like a wise decision when we are trying to declutter the queue.

• Withdrawal and Refund due to Increased Interconnection Costs

-       Savion opposes the high margin MISO is proposing. 

-       A 50% increase in AFS + NU in DPP Ph1 to Ph2 is not acceptable. When MISO is imposing such high penalties upon withdrawal, they should have a smaller error range. A 50% change in NU cost just means that MISO is not holding themselves accountable for good results and this will incentivize mistakes and still gives MISO enough chances to fix it as we move along the queue. It incentivizes MISO to make mistakes since MISO has a bigger buffer (range) to fall upon as we move from one phase to another. In other words, MISO results can have an error rate of 50% from Phase 1 to 2. These numbers should be way smaller if they want to impose such high Penalties upon Withdrawal. We would support an increase of 15-20% in NU cost if we move from Phase 1 to Phase 2 or Phase 2 to Phase 3.

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. Priority for future cycles:

a. Developers who succeed in completing the interconnection process and build projects should be given priority of interconnection in future cycles. 

3. Sale of interconnection queue positions that are to be withdrawn:

a. 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. 

NextEra Energy Resources (NextEra) is appreciative of the opportunity to provide feedback on MISO’s Queue Reform proposal presented in the August 30^th Planning Advisory Committee. 

NextEra continues to support 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 reasonable cost possible, while also responding to the customer demand for the resources seeking interconnection on the MISO system.   NextEra supports an approach that would prioritize projects that have demonstrated readiness and that they have performed their own due diligence around, for example, a) injection analysis, b) environmental assessments and c) buildability assessments.

In regards to the current proposal, NextEra reiterates that, the most significant shortcoming is that it does not address or explore the causes for the delays in the current queue cycles (DPP 2019 through DPP 2021) or create a more effective and timely interconnection process.   NextEra has reviewed the publicly available data and the size of the queue has not impacted processing time for one cycle across all of MISO.  The average processing time has been around four years and none of the elements of the MISO proposal address timing.  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.  Please refer to our comments filed on August 11^th outlining proposed improvements to the Pre-Queue and DPP Phase 1 work that would aid in reducing the gap between queue application window closure and study work beginning.

Applying a MW cap to the size of the queue would reduce the number of projects that are completed, and ultimately increase customer rates MISO’s time-stamped based approach of accepting projects to a capped queue is fraught to have unintended consequences around applicant behaviours and conflict with MISO’s effort to reduce speculative projects from the queue. MISO should also reintroduce the restriction to sell the project to a different developer until after Phase 2 as it will have a clear correlation to reducing speculative projects from the queue.   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. 

Steelhead continues to have three major concerns with MISO’s latest Generator Interconnection Queue Improvements proposal from the August 30^th PAC:

1. The removal of the developer MW cap, while still retaining a queue MW cap, unfairly favors larger developers. Quickness into the queue does not correlate to good projects and the potential for large or numerous projects from a select few companies to fill up the queue cap is harmful to those who have small or few projects.
2. The qualification for Penalty Free Withdrawal is not clear. It sounded like MISO’s position at the August 30^th PAC was that a project would qualify simply if their Network Upgrade costs increase by 50% from Phase I to Phase II or 40% from Phase II to Phase III. However, the posted presentation and Attachment X redlines reference “top 10-25% of all projects,” “top 25% of increases,” and “highest 25% of Network Upgrades.” A provision that Penalty Free Withdrawal applies to the ‘highest X%’ of cost increases is discriminatory and encourages developers to submit larger projects. Larger project will typically have higher upgrade costs, and therefore their cost increases between phases will be larger. While cost increases for a cycle will be roughly proportionate, a larger project will have a higher percentage of total cost increases. Allowing large projects to withdraw penalty free would lead to gaming of the queue and cyclical restudies. We think that a 50% cost increase from Phase I to Phase II and 40% from Phase II to Phase III is fair criteria for Penalty Free Withdrawal, if applied to all projects equally.
3. We continue to disagree with MISO’s proposed penalty on withdrawing projects that do not harm others. In the current process, a project that does not share costs of Common Use Upgrades, Shared Network Upgrades, or Network Upgrades is able to withdraw from the interconnection queue without additional costs. MISO’s proposed change to implement an Automatic Withdrawal Penalty would punish these same generators even when no additional ‘harm’ is put on the rest of the cycle. These withdrawing generators have paid their fair share of study costs, and no additional restudy would be required since they do not share Network Upgrades. The addition of the Automatic Withdrawal Penalty on ‘no-harm withdrawals’ is unjustified and needless.

Further, with the August 30^th PAC materials, we noticed that the Attachment X redlines deviated from MISO’s presentation at a few points. We ask for the following Attachment X cleanup:

1. The transactional sale restriction is still included in Section 4.3. If MISO is removing the developer MW cap, this restriction should also be removed.
2. The added language of “the top 25% of increases” or the “highest 25% of Network Upgrades” in Section 7.6.2.4 is confusing and contradicts MISO’s position at the August 30^th PAC. MISO should clarify that Penalty Free Withdrawal may occur simply if a project’s Network Upgrade costs increase by 50% from Phase I to Phase II or by 35% from Phase II to Phase III (subject to MW thresholds).
3. Section 7.6.2.4 has a 35% increase from Phase II to Phase III while the presentation says 40%. We believe the 35% from the original process should be kept.

Redeux Energy Comments – September 12, 2023

Dear MISO Generator Interconnection Queue Improvements Team,

Redeux Energy (“Redeux”) appreciates the opportunity to submit comments on Generator Interconnection Queue Improvements (“GIQI”) per the August 30^th Planning Advisory Committee meeting. Our goal in the comments below is to help with this process and to follow the MISO guiding principles of a fair and equitable queue process that results in the evaluation of quality projects.

1. Impact of a Queue Cap and First Come First Served Process

Redeux is concerned about the fairness of implementing this process and the negative impact this process will have on the quality of submitted projects.

What are the stated goals of implementing the proposed queue cap?

MISO staff described how a cap would be part of a solution package to reduce the number of projects submitted into each queue. A TBD limit in the number of megawatts where, once reached, submissions would no longer be accepted. As proposed, the cap is designed to set a limit to the number of projects MISO may accept in each cycle - significantly increasing the value of projects that are accepted.

In this proposal, there is no basis for determining project quality with the proposed cap limit. It is a process set to reduce the number of projects based on volume alone.

What are the issues created in a queue cap?

Cap limits establish a limited resource where the value of projects in the queue is inflated compared to non-cap processes. There is an incentive for companies (especially large companies) to throw everything they can into the cap process in order to increase the value of projects irrespective of the quality of these projects. Large companies are also incented to block other companies from submitting – creating an incentive for these companies to submit even more speculative and poor quality projects in that process. 

Initially, MISO staff acknowledged that this would be an issue and described a per-company cap limit to limit the concern that larger companies would take up cap space with projects of a wide range of quality and would crowd out other companies. In the August 30^th planning session, MISO staff advised that the limit per-company was removed.

A per-company cap limit acknowledged this large company submittal challenge and applied a fairness principle that would allow space for other companies to submit projects. In fact, a per-company cap limit would force larger submitters to choose the best projects to submit – a self prioritization process. By removing the per-company cap limit and not putting an alternative process in place, MISO will invite large companies to submit as many projects as possible in order to fill the queue. The execution of this cap process will create an environment against MISO goals of achieving higher quality projects and will, instead, create a process where the quality will decline as long as large developers are unrestrained.

What are the stated goals of implementing the first come first served process?

MISO staff described a first come first served process as the preferred method of filling up the megawatt cap limit. There was no explanation given around why this is the preferred process other than to list less-preferred solutions such as an auction or lottery.

What is the impact of implementing a first come first served process with a queue cap?

MISO Staff described the queue reform process in terms of parents securing Taylor Swift tickets. Using this example, the impact of implementing a first come first served process is the same as providing incentives for scalpers to take over the MISO queue.

To secure limited resources such as projects in a capped queue, a first come first served process means that companies must submit projects in the first second that the queue opens. For the Taylor Swift scalpers, this means investing in technologies that secure all of the Taylor Swift tickets in the first fraction of a second ahead of actual fans – an all too common occurrence.

If MISO continues with this process, MISO is setting up the same incentive for large energy companies with deep pockets to invest in the same technologies as scalpers in order to secure queue positions ahead of other developers. Money well spent for these companies, but a process that ensures that the highest quality projects are not submitted into the process. Instead, MISO is setting up a system where only deep pockets and a wide range of quality projects are submitted through blocking procedures.

What if MISO waits and sees what happens? Address the problem after it happens?

This comment was made by MISO staff during the August 30^th meeting as a potential consideration. We stress that MISO should be aware of the reality of gaming this proposed system ahead of time and should take steps to address the issue. If implemented as suggested, MISO will have a process where deep pockets and scalper-type technologies win the queue rather than the stated intention of having quality projects and/or a fair process.

If MISO chooses to move ahead with a queue cap and first come first served for the queue, we would want MISO to have processes in place that allow for a fair and equitable submission process. This would likely involve investment in technologies that allow for equal submission opportunities, processes for addressing over-submission by individual companies, potential daily submission limits by company over several days, and a fast resolution process for any particular gaming of the system.

What other potential solutions could apply?

Alternately, MISO could remove the submission cap, implement cost increases, and apply this new revenue towards resources to help address the growing queue. For example, MISO is currently incentivized to hold budget costs constant on a yearly basis. For 2023, this means no growth in staff and/or consulting contracts associated with clearing the queues. If MISO were to apply charges towards project submittals towards consultants and staff to manage these queues, this would go a long ways towards addressing this particular concern. As opposed to the current process of holding MISO queue support budgets constant during a growing demand environment.

1. Payments and Penalties

Redeux is supportive of applying payments and penalties directly towards resources that are applied to resolving the growing demand for interconnections. The current MISO incentive for holding resource costs constant during this growing demand environment is not helpful towards the basic goals of meeting State and utility demand.

We believe that any payments and penalties associated with queue submissions should be directly applied to resources that resolve queue challenges. Hire consultants and firms who can apply their talents towards volume resolutions.

Payments and penalties should follow averages based on MISO consultant studies – adjusted by nuances such as refundability. We believe that any recommendations to exceed averages should be noted and justified as to why there will be a benefit. (e.g. If fees above average for other ISO/RTOs are tied to funding that ensures queue expedience.)

What if payments and penalties are applied purely as a deterrent and these revenues are not applied towards resolving queue issues?

This appears to be the status quo in MISO’s proposal. We do not support this as a resolution to queue volume issues – instead it is an incentive for larger, deep pocket developers to fund more speculative projects that push innovative and smaller, quality developers out of the market.

As stated above, a wait and see approach is not appropriate without a direct and expedient resolution process in place ahead of time.

1. MISO Commitments – Timelines, Deliverables, and Use of Fees

Developers will make significant financial, project maturity, and timeline commitments through the current MISO proposed processes. In return, we request that MISO make similar commitments towards delivering reports and studies on the timelines required. We are all in this together and, per recent FERC statements, these commitments should be mutual with obligations and penalties.

We ask that MISO provide commitments to the same stated goals as MISO will impose on developers. Timing commitments, report commitments, quality commitments, and stated penalties in the event that these commitments are not met.

MISO has stated that they intended to include a safety valve to allow projects with a PPA in the cycle if above the cap. MISO should also consider comparable language that would be inclusive of utilities that have non speculative projects. MISO should consider language that includes approval of project by state, city, regulators, boards, etc.