Midwest ISO Stakeholders Briefed On FERC Re-filing

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Stakeholders in the Midwest Independent Transmission System Operator (Midwest ISO) footprint received advance notice of the contents contained in the system operator's re-filing this week with the Federal Energy Regulatory Committee (FERC) regarding its cost allocation proposals for transmission.

FERC deemed the Midwest ISO's so-called ’90/10′ generator interconnection cost allocation methodology proposed in a July 2009 filing "interim" and ordered the system operator to take a broader look at the integration of resources.

The outcome was a new category of transmission projects called multivalue projects (MVPs), which target regional transmission lines, including those used to integrate wind.

Cost allocation for these MVPs will be postage stamped throughout the region, according to the Midwest ISO.

"The difference between the [July 2009] interim filing and now will support the buildout of the region, which should make the pool of costs for general interconnection projects smaller than it has been," according to Jennifer Curran, executive director of transmission strategy at the Midwest ISO.

Regional overlay lines, typically 345 kV and higher, are longer transmission lines that span from transmission provider to transmission provider.

The reaction was mixed among the wind community.

The most important revision found in the MVP announcement was the removal of the 20% chargeback fee for new and existing generators, which was contained in earlier Midwest ISO proposals, says Natalie McIntire, technical policy consultant at Wind On The Wires, a regional partner of the American Wind Energy Association.

While McIntire characterized the MVP plan as ‘a step in the right direction,’ questions remain.

Of interest to wind developers is the fate of the Brookings line, one of four primary lines of the CapX2020 project – a $2 billion initiative designed to ensure grid reliability and ease congestion in the upper Midwest. The Brookings line, a 200-mile, 345 kV transmission line running from Brookings County., S.D., to Hampton, Minn., includes 19 wind projects from 14 developers.

The wind community says Brookings has all the attributes of being an MVP line under the Midwest ISO's definition.

‘Brookings has to be considered an MVP line,’ says Christina Brusven, an associate at Minneapolis-based law firm Frederikson & Byron. "If Brookings is not classified as MVP, we don't know what is.’

Although Curran would not definitely say if Brookings is or is not MVP, she says the line comprises several characteristics of an MVP.

‘Conceptually, Brookings is the type of project that could be deemed as an MVP,’ Curran says. ‘Timing and further study will ultimately be the deciding factor.’

Although the re-filing could benefit wind developers, there are some significant hurdles and unanswered questions remaining.

An issue the Midwest ISO leaves unaddressed is the 90/10 cost allocation approach for generator interconnection that requires wind generators to pay 90% of the cost of network upgrades for projects rated 345 kV and higher. For projects rated lower than 345 kV, generators are required to pay the entire cost. Network upgrades can mean anything from replacing simple equipment to adding an entire transmission line.

Although the 90/10 generator interconnection cost allocation method remains, Frederikso's Brusven says additional designated MVP lines should decrease the number of instances where generators are burdened with shouldering the overwhelming majority of costs for large, regional backbone transmission projects.

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