In the May 30, 2023, meeting of the Regional Expansion Criteria and Benefits Working Group (RECBWG), MISO presented the cost allocation Tariff framework for the Joint Targeted Interconnection Queue (JTIQ) Portfolio. Stakeholders were asked to review and provide feedback on the redlines and proposed framework.
The comment period is extended to NOON EASTERN on Wednesday, June 14.
ENVIRONMENTAL SECTOR’S COMMENTS ON THE JTIQ COST ALLOCATION CHANGES TO THE SPP/MISO JOA, ATTACHMENT FF AND MODULE A
The Environmental Sector supports the goal of the Joint Targeted Interconnection Queue (JTIQ) effort to plan for transmission to support interconnection of future generation near the seam that will also benefit load in order to identify more cost-effective transmission solutions. We also support the intention to provide more cost and timing certainty for interconnection customers. The Environmental Sector understands that MISO and SPP’s proposed cost allocation that mimics the MISO generation interconnection tariff may allow for expediency in utilizing existing provisions and practices to innovate solutions in the near term, yet it may not be the optimal cost allocation for building interregional transmission for the longterm. The Sector supports load providing back-stop funding, which will be ultimately reimbursed by the interconnection customers (ICs) as a practical solution to the timing challenge of bringing together a large number of interconnection customers from multiple study clusters to fund these upgrades. Further, we applaud MISO and SPP for agreeing to annual reporting on potential JTIQ portfolios.
Given the increasing importance of interregional lines, we urge both RTOs to expand their interregional planning efforts to include not only a generation-outlet study but also study transmission needs such as resilience and increasing transfer capability, economic, and reliability, between SPP and MISO and to conduct this planning regularly. More holistic planning, similar to the LRTP planning, is the best way to identify the most cost effective transmission solutions along the seam. Interconnection planning cannot be the only tool for addressing interregional transmission needs between MISO and SPP, and to date, the JTIQ lines are the only upgrades likely to be approved along the MISO-SPP seam since the two regions were established.
One of the most appealing aspects of JTIQ had been the cost-certainty that would have been provided to the ICs by the SPP/MISO declaring the $/MW charge prior to the ICs entering the queue processes. Unfortunately, this cost-certainty was eliminated by the new(ish) true-up provisions. These changes, combined with the recent cost estimate increase from $1.1 billion to $1.86 billion, means that the costs to generators is significantly more than we have been led to believe to date. The Environmental Sector appreciates that cost-estimates for projects are difficult given the current rapid changes in supply costs, supply chains and services costs. However, having the ICs bear the sole risk of these changes in cost estimates when they have no control over the construction of the projects is problematic and may result in a less successful JTIQ buildout. While we appreciate that the transmission owners are required to provide annual updates in changes to their cost estimates, the Environmental Sector believes more should be required. For example, a cost cap can be set for increases. If costs exceed that cap, a specific justification must be provided to MISO and to interconnection customers, and be filed with FERC. Such a cap could provide ICs with comfort about the volume of cost increases. Without some sort of accountability mechanism, we have serious concerns that transmission owners lack the requisite incentive necessary to ensure that costs remain low. While the JTIQ process is modeled on aspects of the generator interconnection process, multiple large 345kV backbone upgrades are more like MISO MVP/LRTP projects, necessitating the need for significantly more oversight than occurs today in the generator interconnection process.
We look forward to seeing and commenting on the remaining tariff redline for this JTIQ cost allocation and integration into the interconnection process. Understanding the details is critical, as they will have significant impact on the outcome. We also urge MISO to give stakeholders a reasonable amount of time to review and provide feedback on the full set of tariff redlines needed to implement JTIQ. And we recommend that MISO and SPP file all proposed JTIQ tariff changes with FERC at the same time, as changes to each region’s tariff as well as the JOA will act as a package to implement this new process along the seam and should be considered together.
We want to highlight that the recently shared cost increases for the JTIQ portfolio are a cause for concern, as they are likely to significantly increase the $/MW charge to be used in the JOA. The $/MW charge has not yet been shared but is a critical element to the success of the JTIQ process. If this number is too high from the beginning, it will not be possible for generators to subscribe to the JTIQ lines, as well as pay for upgrades to the lower sub-345kV system, while also covering any cost increases between planning and commercial operation of the JTIQ lines. A $/MW JTIQ charge that is too high could jeopardize the overall success of the JTIQ effort.
The comments below relate to specific provisions in the changes to the JOA that we found confusing or for which we had comments.
JOINT OPERATING AGREEMENT (JOA)
Adjusted Product Costs (APC) is the lone benefit metric used for allocating capital costs to load. JOA § II. B.(1)(b). While the Environmental Sector respects that APC appears to be the least controversial benefit metrics used by MISO, transmission provides significantly more benefits than APC. We will defer to what the regulators and consumer advocates prefer to estimate the benefits for the cost distributions to load, but it should be acknowledged that APC only provides part of the benefits picture for the JTIQ portfolio.
Charges to Interconnection Customers
90% for capital costs - JOA § II.B.1)a) - the text does not say this charge is “calculated on a dollar per MW basis.” Shouldn’t that text be added?
100% of the JTIQ study costs - JOA § II B.3) - in contrast, this text says “calculated on a dollar per MW basis.”
JOA § II. (D) Identification of JTIQ Screening Group and JTIQ Participation Group:
Two problems with the paragraph below:
Should the numbering under 1) be an (a) and (b) rather than a (1) and (2)?
The following text under (2) does not make sense to us:
1) The JTIQ Screening Group shall consist of all interconnection customers who have submitted interconnection requests into a MISO DPP study cluster [NOTE that MISO is working to determine which regional clusters should be included in the screen] or SPP DISIS study cluster that: (1) has an application deadline that is after the date that the Parties’ respective Boards of Directors have approved a JTIQ portfolio; and (2) has not commenced Phase 1 studies as of the date that the Parties have declared the JTIQ Portfolio fully subscribed before the first cluster commences Phase 1 studies after the JTIQ Portfolio has been declared fully subscribed by the potentially impacted Party prior to the commencement of Phase 1 studies for the study cluster in which such interconnection request shall be studied by the direct connect Party.
JOA § II.D.5) Two types of entities are required to pay the JTIQ Participation Charge:
(a) Those parties who are in the JTIQ Participation Group because they meet the requirements of II.D.2, and
(b) those who are provisionally tagged for JTIQ must also pay “on a provisional basis.”
One problem is that it doesn’t appear that the provisional JTIQ’ers must also meet the requirements of II.D.2).
The language below is confusing relative to these two types of parties. When do ICs in the new cluster become part of an JTIQ Screening Group vs. the provisional JTIQ Participation group?
“Such provisional members shall be required to pay the JTIQ Participation Charge in accordance with the applicable Party’s tariff on a provisional basis and undergo affected systems studies as set forth in Section 9.4.4(III). Not later than the beginning date of the first Decision Point of their cluster study, the direct connect Party shall inform such Interconnection Customers whether they will be included in the JTIQ Screening Group. If a Party determines that interconnection requests provisionally included in a JTIQ Screening Group for which the Party is the direct connect Party no longer should be included in the JTIQ Participation Group, such Party shall refund any portion of the JTIQ Charge collected up to the date of such notification and the interconnection customer’s interconnection requests shall thereafter be processed as set forth in Section 9.4.4(III)”
Comments by the Advanced Power Alliance and Clean Grid Alliance to the RECB and PAC on JTIQ JOA DRAFT Edits
June 14, 2023
The Clean Grid Alliance (CGA) and Advanced Power Alliance (APA) support the general concept of planning for future needs of generation and load in order to more cost-effectively construct transmission solutions. The JTIQ attempts to incorporate this concept in its structure as a mechanism to improve the current impediments that exist to generation interconnection along the seam between MISO and SPP. Our comments, herein, do not represent opposition to these concepts. However, some of the specific provisions in latest rendition of the JTIQ policies as contained in the JOA draft revisions are problematic to a successful transition to this approach and should be modified. The position of the commenters herein are highly impacted by ultimate outcome of the application for DOE Grant assistance. A successful and significant reduction in the costs of these JTIQ projects could, as a practical matter, reduce the concern of some of the provisions proposed, for this portfolio. Our concerns with the proposal will likewise be elevated, to the extent that policies established by the JOA extend beyond this proposal, or in the event the DOE application does not provide a meaningful cost reduction. The need for the JTIQ projects is tied to the failure of joint interregional planning. The JTIQ, with 90% assignment of costs to interconnection customers has a demonstrably significant benefit to other stakeholders beyond the remaining 10%. In future rounds of a JTIQ, MISO and SPP must pursue an approach that takes into account all interregional needs in designing solutions to develop a cost sharing mechanism that appropriately allocates the costs of the investment.
Percentage Assignment of Costs to Generators
The assignment of 90 percent of the costs of development of the JTIQ transmission lines does not align with the benefits that have been shown to flow to load. SPP’s calculation of benefits of the JTIQ transmission lines showed substantial benefits beyond the calculation of APC benefits that are inconsistent with this assignment. Additionally, the benefits to generators are largely unknown. There has been no estimate of the impact of the addition of the JTIQ lines on the total transmission infrastructure costs that would have been assessed to the generators if JTIQ lines are not constructed. In other words, there is little in the analysis that demonstrates the need for these lines for individual generators, whether the JTIQ projects are part of a least cost solution, nor the appropriateness of the costs that the individual generators will be paying. The latest large increase in the costs for the JTIQ lines , now hovering at $1.86 billion, significantly increases the concerns about generators being required to pay a disproportionately large portion of the development costs. Individual generators subject to this charge will not be evaluated to determine whether development of the JTIQ lines will be needed for the specific generation project to interconnect to the grid. Other costs of interconnection are still intact under this process, meaning that there could easily be circumstances where the JTIQ process increases the cost of interconnection without any measured benefit or need being established for any specific project.
Both SPP and MISO have previously represented that the 90/10 construct would be limited to this JTIQ portfolio. However, the JOA draft imbeds this policy in the JOA which means that it would apply to projects going forward, barring a future amendment. The adoption of this cost allocation mechanism ensures that the cost allocation split would be presumed just and reasonable for future portfolios regardless of whether the benefits of such portfolios were similar to the current one. Given the concerns that exist on the current projects being funded primarily by GI customers without a commensurate showing of benefit or need, the placement of this provision in the JOA for future portfolios that may have substantially higher benefits to load such as increased transfer capability, increased savings to load, increased reliability and resilience among others, is unwarranted. From a long-term perspective, it is not sustainable to build out the transmission system largely on the backs of one set of stakeholders when the benefits are broadly dispersed.
If the 90/10 provision is included it should be specific to this set of projects and clearly contingent on DOE funding in the JOA. Many of the concerns about policy in the current round can and hopefully will be mitigated by the application for DOE assistance as it would reduce the burden on GI customers in this instance. There is nothing contemplated currently for such mitigation in future rounds of JTIQ. Accordingly, this provision should not be included for any future projects and should be revisited for this portfolio if DOE funding is not awarded. The future of transmission planning is not in the continuation of siloed analysis of needs and solutions, but in tearing down those walls and assessing them all together. CGA and APA believe that placing the JTIQ cost allocation and siloed needs of interconnection in the JOA language for future rounds will be an impediment to integrated transmission planning moving forward.
Failure to Protect Customers from Cost Increases
The cost increases that have occurred to the JTIQ portfolio before any siting or construction of these projects have begun present an ominous warning as to the need for oversight of costs and a need for mitigation. Once a GIA is signed, it does not appear that increases in costs result in either scrutiny over the increase proposed or the option of a GI customer to withdraw from the agreement. Because the JTIQ projects are generally high voltage and likely to take several years to complete, the risk of cost increases is greater. The JOA should include cost oversight, mitigation, and options for penalty free withdrawal if costs increase beyond a set threshold, similar to or at a higher accountability standard to which backbone transmission expansions cost allocated to load are held.
Need for Certainty on Limited Operations
The long lead times for the JTIQ projects require a better understanding as to the limitations on output for generation subject to the JTIQ charge. The primary concern is on the SPP side, where limitations of LIOS outcomes could mean significant restrictions for generators for years before the JTIQ lines are in service. Understanding these restrictions will be critical to determining the viability of a GI project early in the process, but no later than the GIA. In addition, there is a need for SPP to move to a process in line with the MISO approach to determining and allowing reliable increases to output for those generators waiting on and requiring the JTIQ lines coming in service.
Loss of JTIQ Capacity
The JOA draft contains language that appears designed to terminate the JTIQ charge when the capacity created has been used. However, rather than having a determination as to the capacity being consumed based upon the use of the system, the approach seems to be based entirely on the number of generators that have interconnected and are paying the charge without regard to whether the capacity is actually available. Transmission capacity can and will be used differently as transmission services are sold, load is added, dispatch changes and other circumstances change. There appears to be no language that protects the capacity being primarily paid for by generators subject to the charge due to the use of the capacity for other things such as the sale of transmission service or additions of load.. At a minimum, the language should state that all models used by the RTOs should show the capacity as protected so that the capacity is not used for other purposes. In addition, the termination of the JTIQ charge should occur if the capacity for which the charge exists is no longer available.
Mechanism for Triggering the JTIQ Charge
The CGA and APA have members who are concerned that the trigger for paying the JTIQ charge is not necessarily connected to the GI customer needing any particular line or even the portfolio in order to interconnect. It is entirely plausible that some GICs under this proposal will be charged for the JTIQ even though they have no benefit.
NRIS Charges
APA and CGA understand the language pertaining to the assessment of NRIS in the adjacent region to require the higher standard of delivery to apply in both footprints. We continue to oppose this higher standard of deliverability if the NRIS resource is not provided the benefit of that service in the adjoining region.
Benefits for Paying for Transmission
The current interconnection policies in SPP and MISO are to provide congestion hedging products for GICs that fund network upgrades. The current language of the JOA does not appear to explicitly state that those entities funding projects through the JTIQ will be entitled to similar compensation. We ask that such language be added or that it be made clear in other tariff provisions.
At Risk Requirements Held During the Period Prior to the In-service Dates of JTIQ Lines
MISO and SPP have stated in stakeholder meetings that security for JTIQ Network Upgrades would follow standard Generator Interconnection requirements for financial milestones and 20% security at GIA execution, but none have been identified to date. If costs are identified going forward, APA and GA do not support any security requirements that are higher than the current generator interconnection standard.
Self-Funding Provisions
The proposal is arguably built upon the premise that Transmission Developers should be able to earn a return on assets even if the capital for those assets have been provided at no cost. This element of the JTIQ proposal appears to have been taken from the so called “self-funding” provisions that have been the subject of significant litigation and which was recently rejected at FERC in a filing. CGA and APA will continue to raise objections as to the use of self-funding in both regions. It appears that SPP and MISO have made the decision to proceed with a similar approach in the JTIQ. Assuming that this position is correct and will not be considered, we would ask that SPP and MISO consider modifying the approach to allow a Net Present Value to be paid at the time contemplated for the first payment of the JTIQ charge. This approach is currently provided for in SPP’s tariff for sponsored projects. It would provide increased certainty to GI customers and additional benefits in financing GI projects.
We appreciate MISO’s attention to the concerns raised in these comments and look forward to working with MISO and SPP toward resolution.
Sincerely,
Rhonda Peters, Ph.D. Steve Gaw
Clean Grid Alliance Advanced Power Alliance
The Competitive Transmission Developer (CTD) sector submits these comments responding specifically to MISO’s feedback (posted 5/30/2023) indicating that the JTIQ projects “are not Order 1000 projects but rather Generator Interconnection Projects studied for purposes of interconnecting new generation.” We assume that by “Order 1000 projects,” MISO means projects that are eligible for MISO’s Competitive Developer Selection Process.
We note that the JTIQ projects do meet the FERC Order No. 1000 requirement to be competitively bid. The projects were identified in a joint interregional planning study aimed at providing multiple types of transmission benefits. As noted in the JTIQ study report, these needs included interconnecting low-cost resources in the MISO and SPP queues, but also providing economic and reliability benefits to customers in both regions. In addition to being jointly planned by MISO and SPP, the JTIQ projects’ costs will be allocated to customers across two RTO regions, which requires them to be competitively bid.
The sector also points out that two of the projects originally developed for the JTIQ portfolio [Jamestown - Ellendale and Big Stone South - Alexandria - Riverview - Quarry - Monticello (Cassie’s Crossing)] were subsequently relabeled and approved as LRTP Tranche 1 projects. While none of the defining characteristics of these two projects changed in reclassifying them as LRTP projects, they are now considered Eligible Projects – and would be competitively bid, were it not for state right of first refusal laws. This example illustrates the arbitrary nature of MISO’s decision to label the remaining JTIQ projects as Generator Interconnection Projects, and to take the position that they were identified for a different purpose and provide different benefits than the Jamestown – Ellendale and Big Stone South – Cassie’s Crossing projects.
We conclude by noting that in light of the increased cost estimates for the JTIQ projects (from $1.1B to almost $1.9B), conducting competitive bidding processes for these projects could provide significant value to interconnection and load customers. Specifically, the cost containment mechanisms that are routinely offered as part of these processes could materially reduce the cost and schedule risks associated with these - and future - JTIQ projects.
RECBWG: JTIQ Cost Allocation Tariff Feedback (20230530)
MISO Transmission Owners Feedback
June 13, 2023
The MISO Transmission Owners submit the following feedback on the proposed revisions to the MISO-SPP Joint Operating Agreement (JOA) and Module A and Attachment FF discussed during the JTIQ Cost Allocation Tariff Overview presentation at the May 30, 2023 RECB Working Group meeting.
The proposed Tariff red-lines and proposed framework align with our current understanding of the JTIQ cost allocation, recognizing that some issues are still being discussed and were not included in the red-lines. We look forward to reviewing the detailed attachments and schedules for cost recovery when they are available.
Please see separately submitted markup of SPP JOA 9.2 Section II language.
Also, in section I, consider hyphenating:
Please let me know if questions.
The Missouri Joint Municipal Electric Utility Commission d/b/a Missouri Electric Commission supports the revisions to the MISO-SPP JOA and the MISO Tariff to incorporate the cost allocation framework for the JTIQ portfolio presented at the May 30 RECBWG meeting.