In the April 26, 2023, meeting of the Planning Advisory Committee (PAC), MISO presented Joint Targeted Interconnection Queue (JTIQ) draft tariff additions and revisions. Stakeholders were invited to submit feedback on the proposed Tariff framework.
Comments are due by May 10.
Council of the City of New Orleans (Council)
Response to PAC Feedback Request on JTIQ
Submitted by May 10, 2023
The Council appreciates the opportunity to provide feedback to MISO on the proposed JTIQ project cost allocation and cost recovery. As an initial matter, the Council does not oppose the proposed JTIQ projects, but the Council has a concern about MISO’s proposed cost allocation.
The Council understands that the identified JTIQ projects are characterized as generator interconnection projects, and therefore, are subject to MISO’s existing cost allocation method of 90% to interconnecting generators and 10% to system-wide load for projects > 345 kV. The Council also understands that the identified JTIQ projects are located only in the MISO-North subregion along the seams with SPP.
That said, the Council is unaware that MISO has performed any analysis or provided any data that demonstrates that the benefits from the proposed JTIQ projects will actually flow to the MISO-South subregion (and specifically New Orleans) commensurate with the costs that will be allocated in light of the limited transfer capabilities over the north-south intertie. Without this showing, MISO has not demonstrated how a 10% allocation of JTIQ costs to system-wide load is just and reasonable.[1]
Accordingly, the Council asks MISO to either make the necessary showing or consider changing its proposed allocation to system-wide load.
[1] See Midcontinent Indep. System Operator, Inc., 179 FERC ¶ 61,124 at PP 68-71, order on reh’g, 181 FERC ¶ 61,219, at P 41 (2022) (finding that, due to the transfer limits between MISO’s Midwest subregion and the South subregion, the benefits of projects in the Midwest Subregion accrue broadly to that region with very few benefits accruing to the South subregion, and therefore, cost allocation based on a MISO-wide allocation does not satisfy the requirement that costs be allocated in a manner that is at least roughly commensurate with the estimated benefits).
Mississippi Public Service Commission (MPSC) and the Arkansas Public Service Commission (APSC) Feedback Regarding
JTIQ Draft Tariff Language - PAC (20230426)
MISO Requested Feedback Statement:
In the April 26, 2023, meeting of the Planning Advisory Committee (PAC), MISO presented Joint Targeted Interconnection Queue (JTIQ) draft tariff additions and revisions. Stakeholders were invited to submit feedback on the proposed Tariff framework.
Comments are due by May 10, 2023.
Feedback:
The MPSC and APSC are limited in the feedback provided given the high level (and low detail) provided in MISO’s presentation. The following are questions and concerns to be considered in development of Tariff language:
1. MISO representatives have described the JTIQ process as a “one-off” noting that subsequent JTIQ studies and new projects/portfolios will not be routine. The Tariff changes should reflect these statements. One option is to sunset the JTIQ Tariff language and refile in the future if a subsequent portfolio is proposed. Alternatively, MISO should include threshold criteria that must be met before a subsequent JTIQ study process commences, including a super majority vote by the PAC requesting a new JTIQ study. Absent objective criteria, subsequent JTIQ studies will be based on MISO’s subjective preference.
2. Recognizing that JTIQ is a “one off,” MISO should be clear in Tariff language and transmittal letter that this filing will not be considered as precedential (binding) on the development of subsequent JTIQ portfolios.
3. Will the Tariff language restrict JTIQ projects to those that operate at 345 kV and higher?
4. MISO Load’s 10% should be recovered from the subregion where the projects are located.
5. MISO proposes a “flat monthly charge to load and generators.” (Slide 11). Does that mean a stated rate ($/MW) filed at FERC under FPA section 205, included in the Tariff, and accompanied by supporting cost data (i.e., not a formula rate)? If not, please explain.
6. Recognizing that the purpose of JTIQ is to coordinate projects on the SPP/MISO seam to facilitate generator interconnection and reduce the cost of network upgrades (not shift the cost of those upgrades to load), MISO should develop an analysis that measures the savings (reduced cost of interconnection-related network upgrades) resulting from the JTIQ process. Measuring these benefits will help determine whether subsequent JTIQ study processes and investment are cost beneficial.
7. MISO’s proposal continues to place load in the position of being the project guarantors. Putting the 10% cost allocation to load aside, if insufficient generators subscribe to pay JTIQ costs or if generators subsequently default, load (customers) are responsible to cover the cost difference between what interconnecting generators are willing to pay and the total cost of the projects.
MISO argues that the risk is very small but offers no analysis to support that. If the risk is small, then interconnecting generators can bear it. If the risk is high, it would be more reasonable to hold an open season so that sufficient interested generation developers have the opportunity to commit/sign up. If enough do, then construction could begin without putting customers at risk. MISO’s proposal does nothing to mitigate this risk.
8. MISO has not explained what happens should a generator developer default before or during operations. If a developer commits to pay JTIQ costs as a condition to interconnecting, those payments should be guaranteed for the term of the agreement or other interconnecting generators (not load) should be obligated as the insurers of last resort. The Tariff change should capture this treatment and protect load from being the insurer after the fact.
9. MISO proposed to develop a separate JTIQ Agreement in an effort to avoid changing existing agreements. MISO has not explained the relationship between the JTIQ Agreement and each generators GIA. Do the terms parallel? Do the agreements have separate financial security requirements? Is a default on one agreement considered a default on the other? These Agreements should be drafted with an eye towards protecting load from additional cost responsibilities that would not exist under current generator interconnection agreements and current interconnection procedures.
10. The Tariff should explain how the true-up process works to ensure load pays no more than 10% of the cost. That true-up applies to payments due to (i) insufficient generator developers committing to pay JTIQ costs, and (ii) generators that default on their payment obligations (e.g., early termination of operations, default on financial assurance). True-up must include interest to ensure return of the time value of money.
11. The presentation did not explain how load’s obligation to cover the cost not recovered due to generator undersubscription would be split between SPP and MISO load. Will the ultimate cost born by an RTO’s load be in proportion to the benefit determination? In other words, if undersubscription results in $500 million being born by load, and if SPP receives 70% of the benefits (and MISO 30%), would SPP load be responsible for 70% of the $500 million ($350 million)? If not, how will it be apportioned?
The Competitive Transmission Developer (CTD) sector appreciates MISO’s and SPP’s initiative and efforts to find an alternative route forward for cost-effective interregional transmission projects that will provide benefits to generators and load in both MISO and SPP. The cost allocation method proposed for JTIQ projects, as codified in MISO’s proposed tariff provisions, generally makes sense based on the project drivers and benefits demonstrated in the JTIQ Study.
The currently proposed tariff provisions would categorize the JTIQ projects as Generator Interconnection Projects that are not eligible for MISO’s Competitive Developer Selection Process. The CTD sector notes that because the JTIQ projects were identified by MISO and SPP in a coordinated interregional planning study, and particularly because the costs of the JTIQ projects would be allocated to generators and load across two planning regions, FERC Order 1000 requires them to be competitively bid. Competition for these projects is also an appropriate protection for customers, whether they are generator interconnection customers, or load that will be effectively serving as a funding backstop for the JTIQ projects.
Recognizing that time is of the essence for generation developers, the CTD sector observes that schedule and in-service date guarantees are among the risk mitigation mechanisms routinely offered as part of competitive bidding processes. These mechanisms, which are not seen outside of the competitive transmission process, can materially reduce the cost and schedule risks associated with these (and future) JTIQ projects.
Invenergy thanks MISO for the opportunity to provide feedback on the proposed tariff framework for JTIQ tariff additions and revisions.
Invenergy understands the need for expediency for these revisions and the challenges of compromise in a rapidly changing environment. However, Invenergy would point towards fundamental departures from the Joint RTOs proposal last year and the recent outlines, particularly in the cost certainty value proposition. For example, the most recent white paper (August 2022) proposed that the $/MW charge was intended to provide some cost certainty at the beginning of DPP and that any interconnection customer in an Affected System Zone would “only pay one $/MW rate that was in effect at the time the interconnection request is submitted” (Section 2.1.1.6). The new proposal, gathered from several different presentations, seems to be that MISO reserves the right to adjust the $/MW threshold without limitations until JTIQ project COD.
A lack of threshold or limitation to the $/MW cost jeopardizes the concept of cost certainty upon which the JTIQ AFZ proposal was built. While some might argue that this proposal adds some certainty in knowing which upgrades will be built, any benefits of this knowledge are minimized by MISO’s new move towards a self-funding framework. As interconnection customers have argued across many years and forums, self-funding removes visibility and control from interconnection customers on project construction timeline and cost.
The combination of the non-committal $/MW and self-funding changes will remove all agency from interconnection customers to limit the cost of these portfolios, for which they are being assigned a 90% of the bill.
Increasing cost certainty was the foundational rationale for the JTIQ AFZ proposal and must be preserved. Should the Joint RTOs continue to move towards a self-funding proposal, Invenergy asks MISO to implement safe guards against cost overruns. This could take the form of a % cost cap, after which any costs would be allocated to the next JTIQ portfolio, or through triggering a provision for contract renegotiation or penalty-free withdrawal.
Invenergy would also request that MISO provide stakeholders with a document of changes made to the JTIQ proposal since the white paper, as this understanding was gathered from several presentations in different forums and Q&A sessions with staff.
Invenergy thanks MISO staff for their time and consideration.
Transmission Owner Feedback on the Joint Targeted Interconnection Queue (JTIQ) Overview of Anticipated Tariff Additions and Revisions
May 10, 2023
In the April 26, 2023, meeting of the Planning Advisory Committee (PAC), MISO presented an Overview of Anticipated Tariff Additions and Revisions necessary to implement the Joint Targeted Interconnection Queue (JTIQ) study, resulting transmission project development, cost allocation and cost recovery. The MISO Transmission Owners provide the following comments on the proposed Tariff framework.
Overall, the Owners support the framework and the process, and see it as an improvement to the current Affected System Study process. The Owners look froward to continuing to work with MISO on the details of implementation as the tariff language is developed, both through the PAC and the RECB.
Regarding the details MISO has presented thus far, the Owners request additional discussion in the appropriate forum on the following items:
• Facilities located within 5 substations from MISO’s Transmission System for >200kV facilities,
• Facilities located within 2 substations away from MISO’s Transmission System for 200-300 kV facilities,
• Facilities located within 1 substation away for facilities greater than 300 kV from MISO’s Transmission System
The Owners would like to better understand the rationale behind this approach, and whether SPP is planning to use the same approach to monitor MISO Transmission Owners facilities in their Generator Interconnection studies?