SPP, MISO joint transmission portfolio draws support, criticism in comments to FERC

Various stakeholders have expressed support for the plan by Southwest Power Pool and Midcontinent Independent System Operator to jointly develop a portfolio of transmission projects in comments filed to federal regulators, but some market participants remain opposed to key components of the framework, mostly cost allocation.

The stakeholders' filings arrived at the Federal Energy Regulatory Commission ahead of an extended comment period that ended Sept. 19 that SPP and MISO requested in August for the $1.7 billion Joint Targeted Interconnection Queue portfolio, which consists of transmission projects along the seams between their respective regions. JTIQ No. 1 envisions construction of five transmission projects across seven Midwest states that could enable at least 28 GW of new generation in a first-of-its kind collaboration between the RTOs that would address issues hindering interconnection in these regions.

SPP and MISO submitted companion filings (ER24-2798 and ER24-2797) to FERC on Aug. 16 for proposed revisions to their joint operating agreement that were required to implement the JTIQ framework, and the grid operators followed up that with separate filings (ER24-2825 and ER24-2871) containing parallel revisions to their respective tariffs. In the filings, SPP and MISO requested that FERC accept the proposed revisions to the JOA and tariffs and to have them become effective Nov. 14.

The grid operators intend to seek approval for the initial JTIQ portfolio from their respective boards after FERC acceptance of both the JOA and tariff revisions and they hope to have both approved before the end of the year.

Division over cost allocation

The stakeholders who filed comments to FERC Sept. 18 and 19 covered a wide spectrum, including public utility commissions, clean energy organizations, transmission companies, public interest organizations and the Organization of MISO States.

While the group was largely supportive of the JTIQ framework, some stakeholders expressed concerned over some components, such as the cost-allocation structure and backstop funding provisions. SPP and MISO's cost-allocation structure for JTIQ calls for 100% of capital costs for the portfolio to be borne by interconnection customers and envisions loads in both RTOs' service regions as the parties responsible for backstop funding for project costs.

The grid operators had previously proposed that interconnection customers pay for 90% of the projects' cost and that load pay the remaining 10%, but the plan was changed after the Department of Energy awarded a $464.5 million grant to the JTIQ portfolio through its Grid Resilience and Innovation Partnerships program last October to help offset some of the capital costs.

The cost-allocation issue proved to be too much for a group of clean energy organizations collectively called the Clean Energy Associations, which urged FERC to reject the proposal as constituted and direct SPP and MISO to "submit a replacement proposal with a cost allocation methodology that is consistent with the Federal Power Act."

"In particular, the proposed cost allocation framework in the JTIQ proposal is unjust and unreasonable, because it allocates the costs of the projects that will provide benefits to multiple stakeholders solely to the developers," Clean Energy Associations said in its protest filed Sept. 19. "The proposal also increases costs considerably by adopting a form of transmission owner self-funding, despite outstanding legal concerns with such mechanisms. The stated goal of JTIQ—to interconnect gigawatts of new energy—is threatened by the fact that the generators would be subject to extraordinary costs in exchange for little of value. With load serving as a backstop, this increases the risk that load will be needed as a backstop due to projects' inability or unwillingness to bear those costs."

OMS acknowledged in its filing of support that the cost-allocation structure was a sore spot for many but indicated that JTIQ would greatly help address backlogged interconnection queues.

"The Commission should approve these filings because the transmission system is at capacity along the MISO-SPP seam, MISO and SPP's current AFS [affected system study] process is practically dysfunctional, and JTIQ Portfolio #1 will, as articulated by MISO and SPP, overhaul the status quo to allow generation developers to learn their cost responsibility earlier, interconnect new generation quicker, and lower total system costs," OMS said in comments filed Sept. 19. "OMS acknowledges that the cost recovery mechanisms proposed by the RTOs may have their detractors but urges the Commission not to make the perfect the enemy of the good."

Limited protest

The Mississippi Public Service Commission filed a limited protest with FERC on Sept. 19 over the plan, urging the agency to reject the part of MISO's proposal that would allocate all projects' backstop funding liability to load within the entire service region. This would include the MISO South subregion, which includes parts of Mississippi, Arkansas and Louisiana.

MPSC said the proposal discriminates against MISO South customers who do not benefit from JTIQ No. 1, which would feature transmission projects in the Midwest.

"MISO does not provide data showing how the faster interconnection of projects caused by JTIQ Portfolio #1, all of which are located in MISO North, will benefit MISO South load," MPSC said in its comments. "MISO asks the Commission to take it on faith, despite MISO's direct testimony and subsequent precedent that MISO has relied on, that MISO South will somehow benefit. The Commission previously found that MISO South load will not benefit from projects in MISO Midwest (like JTIQ Portfolio #1), even if they reduce energy costs, because of the minimal transfer capability between these subregions."