Responses vary on MISO's petition on watchdog role in transmission planning

State regulators, market watchdogs, and consumer advocacy groups differed from electric transmission owners and trade organizations on whether federal regulators should grant the Midcontinent Independent System Operator's request for a declaratory order to confirm that its own watchdog lacks oversight authority for transmission planning.

State regulators, watchdogs, and consumer groups argued in comments filed with the US Federal Energy Regulatory Commission that Potomac Economics, MISO's independent market monitor, performed essential transmission monitoring work to ensure market fairness and urged the commission to either deny MISO's request or issue a more limited ruling.

Transmission owners and trade organizations sided with MISO, however, saying that FERC should grant the request and find that MISO is not obligated to compensate Potomac for what the grid operator deems "unsolicited transmission planning and monitoring activities."

The comments were filed with FERC June 13 in response to MISO's petition [Docket EL25-80], which was submitted May 7.

The Illinois attorney general's office, the Mississippi Public Service Commission, the Coalition of MISO Transmission Customers, consumer advocates representing New Jersey and Maryland, and the market watchdogs for PJM Interconnection and ISO-New England filed comments protesting MISO's petition.

Parties that filed comments supporting MISO's stance included the MISO Transmission Owners, transmission company ITC, Americans for a Clean Energy Grid, and the Edison Electric Institute.

Potomac Economics also filed comments in protest, urging FERC to clarify both that the IMM has the authority to monitor MISO's transmission planning and that MISO may not impede such monitoring.

The Organization of MISO States, a body of regulators from state utility commissions, advocated for FERC to strike a balance in its decision.

Long-running dispute

The petition from MISO, which manages the electric grid across 15 states in the US Midwest and South, stems from a long-running dispute with some stakeholders and Potomac Economics President David Patton over concerns that the IMM was reaching beyond the scope of its oversight with recommendations concerning long-range transmission planning and the methodology used to assess the benefit-to-cost ratio of the projects portfolio.

The situation came to a head in February, when the Markets Committee of MISO's Board of Directors passed a motion directing the grid operator to seek answers from FERC on whether the IMM should have any role in transmission planning.

The Markets Committee also informed Potomac Economics that it would not be paid for future transmission planning work until further action, or an order from FERC, resolved the matter.

MISO contends in the petition that its tariff does not allow the IMM to play a role in transmission planning, but the Mississippi Public Service Commission said it believes the IMM's job includes "evaluating the assumptions, benefits, and results MISO uses to justify these enormous investments in the transmission system."

"The petition confuses the IMM's monitoring of [long-range transmission planning] with the independent transmission monitoring function that has been discussed. The IMM is not a transmission planner and is not operating as an ITM," the PSC said. "... But the IMM should absolutely be able to identify and comment on (from an economic and markets perspective) any unreasonable assumptions and modeling that could lead to overinvestment in transmission, resulting in unjust and unreasonable costs."

The Coalition of MISO Transmission Customers, which filed its protest in conjunction with the Resale Power Group of Iowa and the Wisconsin Industrial Energy Group, said MISO's petition was more a result of Potomac Economics' assessment of LRTP portfolios, rather than the IMM's role in the matter.

"MISO's petition is before the Commission today because MISO (and certain stakeholders aligned with MISO on LTRP Tranches 1 and 2.1) disagreed substantively with Potomac's analysis and advice that highlighted potential flaws in MISO's rationale behind its transmission planning and potential adverse market and consumer impacts," the organizations said.

"If Potomac applauded MISO's LRTP and endorsed all of MISO's cost-benefit metrics underpinning the approval of a $21.8 billion portfolio of projects, MISO likely would not have initiated this docket."

Seeking clear guidelines

The MISO Transmission Owners said that MISO's tariff unequivocally does not allow the IMM to have a direct role in transmission planning and monitoring.

"As MISO's petition points out, the IMM was not created by statute and '[b]eyond its contractually assigned tasks, the [IMM] has no independent legal interest of its own' in MISO's markets," the transmission owners said. "The 'contractually assigned tasks' of the IMM are set forth in MISO's tariff, and they authorize the IMM to monitor the markets and services provided by MISO. The tariff does not authorize Potomac to unilaterally engage in unsolicited transmission planning or monitoring activities and bill MISO's customers for it."

Americans for a Clean Energy Grid said it was vital for FERC to issue clear guidelines on the scope of the IMM's role.

"Without a clear finding from the Commission on the authority provided to the IMM, the scope of its authority may continue to expand into other matters outside of its tariff-defined responsibilities," ACEG said. "This would potentially interfere with MISO's authority over transmission planning, as the parameters and goals of the IMM's participation in transmission monitoring are not defined, and ... development of transmission in MISO is essential to the reliable and cost-effective development of the grid."

The Organization of MISO States took a more nuanced stance in its comments, asking that FERC clarify the IMM's role in transmission planning in a manner "that preserves its essential advisory function while respecting state jurisdiction."

"OMS believes the IMM's role should continue to focus on identifying how transmission planning decisions influence market outcomes without extending into the decision-making processes of planners, states, or regulators," the group said. "Transmission planning is not a core function of the IMM and should not become one, but relevant market observations should not be muted. A balance must be struck."