Lower Voltage Interregional Economic Projects. RECBWG April 18, 2018

Transcription

1 Lower Voltage Interregional Economic Projects RECBWG April 18, 2018

2 Interregional Gaps & Inconsistencies 1. No tariff defined cost allocation for sub 345 kv economic projects with PJM 2. Economic projects with SPP must be 345 kv+ to be regionally cost shared within MISO 3. No tariff defined cost allocation for sub 345 kv interregional projects located wholly outside of MISO 2

3 1. FERC Docket EL13-88 ( NIPSCO ) Order on Rehearing and Compliance FERC issued the following directive on January 19, 2017 Ordering Paragraph 51 FERC Directive Confirm that the existing Market Efficiency Project cost allocation method will apply to MISO s share of the cost of interregional economic transmission projects above 100 kv but below 345 kv that qualify as Market Efficiency Projects or to propose tariff revisions to apply a different regional cost allocation method for MISO s share of the cost of such projects. Upon review of MISO s compliance filing, including any supporting evidence, and consideration of any comments filed in response, the Commission will determine the just and reasonable MISO regional cost allocation method for MISO s share of the cost of interregional economic transmission projects above 100 kv but below 345 kv that qualify as Market Efficiency Projects. MISO requested an extension to comply, which was granted by FERC MISO has until October 31, 2018 to comply 3

4 2. Develop MISO regional cost allocation for interregional economic projects down to 100kV, PJM and SPP seam PJM and SPP, respectively, regionally cost share lower voltage economic projects Per FERC directive interregional MEP with PJM is set at 100kV MISO acknowledges the cost allocation gap between our neighbors and inconsistencies amongst seams 4

5 3. MISO s Attachment FF-6 Tariff/Gap Filing Attachment FF-6 describes the cost allocation procedures during the MISO South Transition Period Attachment FF-6 only addresses BRP, MEP, MVPs. It does not address transmission projects located wholly outside of MISO other than Targeted Market Efficiency Projects. In November 2016, MISO made a FERC filing proposing a 100% LRZ cost allocation for economic projects located wholly outside of MISO (i.e. Attachment FF-6 Gap Filing ) In September 2017, FERC rejected MISO s proposal. FERC rejected the proposed different cost allocations for economic projects based on where they were terminating. 5

6 MISO s Current Cost Allocation for Interregional Economic Projects Current situation results in cost sharing misalignment amongst neighboring seams, complicating interregional planning On April 21, 2016, FERC issued its Order in Docket No. ER13-88 requiring MISO to reduce its minimum voltage threshold for economic projects with PJM from 345 kv to 100 kv 100 kv-345 kv Tie Line or Wholly Within MISO Compliance Filing Due By 10/31/2018 PJM Terminates Wholly Outside MISO Tie Line or Wholly Within MISO SPP Terminates Wholly Outside MISO No Mechanism Local TO No Mechanism 6

7 How does MISO address these inconsistencies and gaps? 7

8 Stakeholder Feedback Some stakeholders supported MISO lowering the voltage threshold with SPP to mirror that of PJM Others do not support lowering voltage threshold with SPP to 100 kv Order 1000 does not require MISO to have the same interregional processes and methods with each of its neighbors FERC has already considered SPP s and others arguments regarding lowering the voltage threshold for MISO/SPP interregional economic projects to 100 kv in FERC Docket EL13-88 Proceedings addressing the 100 kv threshold with PJM are unresolved 8

9 Options for Consistency and Simplification Option 1 Option kv+ Less than 230 kv Less than 230 kv Regional MEP Economic Other Economic Other Interregional with PJM (Tie-Line or wholly within MISO) Wholly within PJM MEP MEP MEP MEP MEP MEP Interregional with SPP (Tie-Line or wholly within MISO) MEP MEP Economic Other Wholly within SPP MEP MEP Economic Other 9

10 Next Steps Present proposal at May RECB Working Group Finalize proposal at June RECB Comply with FERC s directive in Docket EL13-88 by October 31,

11 Contact Davey Lopez Planning Coordination & Strategy Adam Solomon Planning Coordination & Strategy Eric Thoms Manager, Interregional Planning & Coordination 11

12 Appendix

13 FERC Order 1000 Cost Allocation Principles 1. Costs should be allocated to those who benefit in a manner that is roughly commensurate with estimated benefits 2. Costs should not be allocated involuntarily to those that receive no benefit, at present or in likely future scenarios 3. Project benefit-to-cost ratio thresholds should not exceed 1.25 unless justified and approved by FERC 4. Costs of regional and interregional facilities must be allocated solely within the transmission planning region unless an entity outside the region voluntarily agrees to assume a portion of the costs 5. The cost allocation method and data requirements for determining benefits and identifying beneficiaries must be transparent 6. Different cost allocation methods may be applied to different types of transmission facilities. 13

14 Neighboring Cost Allocation PJM and the Southwest Power Pool (SPP), regionally cost share lower voltage economic projects. PJM Economic projects that are 500 kv and above or double-circuit 345 kv facilities are allocated 50 percent postage stamp and 50 percent to individual pricing zones based on benefits distribution Lower voltage economic projects are allocated 100 percent to individual transmission pricing zones based on the benefit distribution. The cost of any project costing less than $5 million is assigned 100 percent to the pricing zone where the project is located Interregional projects are cost shared consistent w/ regional projects SPP Highway/Byway Approach The costs of projects (including economic projects) greater than 300 kv are allocated 100 percent postage stamp Costs of economic projects between 100 kv and 300 kv are allocated 1/3 postage stamp and 2/3 to the local pricing zone(s) Economic projects below 100kV are paid for by the local pricing zone Interregional projects are allocated 100 percent postage stamp 14