In the April 26, 2023, meeting of the Planning Advisory Committee (PAC), MISO proposed removal of the Limited Review Requirement in the MISO Tariff. With the commitment to retain the full MVP reviews every three years, do you support the removal of limited reviews?
Comments are due by May 12, 2023.
Mississippi Public Service Commission (MPSC) Feedback Regarding Removal Of The Limited Review Requirements
in the MISO Tariff – PAC (20230426)
MISO Requested Feedback Statement:
In the April 26, 2023, meeting of the Planning Advisory Committee (PAC), MISO proposed removal of the Limited Annual Review Requirement in the MISO Tariff. With the commitment to retain the full MVP reviews every three years, do you support the removal of limited reviews?
Comments are due by May 12, 2023.
Feedback:
The MPSC disagrees with MISO’s proposal to eliminate the Multi-Value Project (MVP) Limited Annual Review requirements (Review Requirement). MISO justifies this proposal on two grounds:
MISO proposed the annual Review Requirement to aid in the preparation of the triennial review. See MISO Compliance Filing, Docket No. ER12-1564-000, April 18, 2012, at 3. The reviews are required to “analyze relevant economic factors, quantify the economic benefits, and examine the qualitative impacts.” Id. at 2. Together, the reviews…
will calculate MVP costs and benefits on a forward-looking basis, over both 20-year and 40-year periods. The cost calculation will use updated project costs and in-service dates provided in the latest MTEP quarterly status report, and the benefits calculation will use updated future scenarios from the latest MTEP planning cycle. Id. at 3.
Despite not being required by FERC, MISO proposed, and FERC accepted the Review Requirement. See Order on Compliance Filing, Midwest Independent Transmission System Operator, Inc. and the Midwest ISO Transmission Owners, P. 34, Docket No. ER12-1564-000, 146 FERC ¶ 61,163 (Mar. 7, 2014).
Although not cited in MISO’s compliance filing, a likely rationale offered up in a protest of the original filing for adding the Review Requirement is as follows:
Once the construction of projects in the MVP portfolios begins, there will be dramatic swings in costs each year …. Allowing three years to lapse between reviews increases the size of the egg that will need to be unscrambled if a review shows that the benefits of MVPs are not accruing to customers at a level that is consistent with the current allocation of costs.
See Protest of the MISO Northeast Transmission Customers, Midwest Independent Transmission. System Operator, Inc., P. 4-5, Docket No. ER12-1564-000 (May 9, 2012).
The underlying purpose for the Review Requirement has not changed. If anything, considering the change in the cost of MVP portfolios - - from $5 billion circa 2010 to over $100 billion in 2023 - - these annual reviews are more important now than ever.
Annual reviews are used to determine whether the assumptions relied upon to authorize these projects and the resulting benefits projected are still valid. In fact, MISO stated that it would “conduct more limited annual reviews to track relevant cost and benefit data on a regular basis.” See MISO Compliance Filing, Docket No. ER12-1564-000, April 18, 2012, at 3. Continuing to review the information annually will ensure that the MISO Board at least has an opportunity to take action to reduce further economic loss should a Board-approved project be determined no longer to be beneficial. Relying exclusively on the triennial review will prevent the Board from stemming the flow of imprudent investment in a non-beneficial project for three years.
MISO’s statement that changes to the first single portfolio of MVPs valued at $5 billion to date were minimal offers no assurances that changes to the upcoming proposed four tranches of MVPs valued at over $100 billion will also be minimal. The magnitude and pace of the change in resources and their attributes, evolving technologies and their costs, an uncertain rate of electrification, and the persistent inflationary pressures on the cost of equipment are but a few of the factors that will affect underlying assumptions in the technical and economic viability of new MVPs.
MISO’s second argument regarding the desire to reduce its workload associated with the Review Requirement is equally unpersuasive. As noted earlier, FERC’s acceptance of MISO’s MVP proposal was premised in part upon MISO’s annual reviews, which provide due diligence in verifying its assumptions are accurate. Waiting three years for that verification is unreasonable and inconsistent with the justification under which FERC accepted MISO’s MVP proposal.
The Competitive Transmission Developer (CTD) sector appreciates MISO initiative and efforts to identify process changes to increase its productivity and focusing staff’s time. The proposed changes to the MVP Limited Review Process generally meets this requirement. However, the CTD sector believes that MISO should not completely eliminate the Annual Review as described below. In addition, the CTD sector believes that MISO should not stop performing the Triennial Reviews at the end of Year 6.
Triennial Reviews (Full Review)
The CTD sector recommends that MISO continue to perform Triennial Reviews on the MVPs until they have all been placed into service. The projects making up LRTP Tranche 1 (MTEP2021) are not identified to be placed into service until 2028 and after, which is beyond the 6 year timeframe. The Triennial Reviews should continue to be performed beyond Year 6 in order to capture the final costs of the project in order to provide the economic, public policy and qualitative benefits based on actual information (final costs, in-service date, etc.) and not projected information.
Annual Reviews (Limited Reviews)
The CTD sector recommends that MISO continue to perform an Annual Review of the MVPs for each non-Triennial Review year until the projects have been placed into service using a revised requirement for the annual review. The annual review should only include the updated project costs and in-service dates as they are currently presented. The annual review would not need to provide the quantitative benefits and historical market and operational data that are included in the Triennial Review. Since there will be a large number of MVPs coming out of LRTP Tranche 1 and Tranche 2, providing all of this data in one place for the stakeholders to review is preferred over having to look at each individual projects quarterly report. This change continues to allow MISO to reduce staff’s time in producing the annual review.
Quarterly Reports
As part of MISO’s justification for making changes to the MVP Review Process, MISO noted that additional processes have been added to provide information and monitoring of MVPs, including Quarterly Project Reporting. The CTD sector has found that while MISO has put the processes into place, not all of the Transmission Owners are providing quarterly updates. Stakeholders are unable to rely on the Quarterly Reports being up-to-date and providing accurate real time information.
The Environmental Sector supports MISO's proposal to eliminate its obligation for annual limited review of MVP while retaining the full MVP review every three years for two cycles. We agree with MISO's justification and appreciate MISO's communications with stakeholders around this proposal before moving forward.
Thank you for the opportunity to provide comment.
MISO Environmental Sector