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MISO Cost Allocation working group Scope

Rao Konidena's picture
Rao Konidena 6,539
Independent Consultant, Rakon Energy LLC

Rao Konidena found Rakon Energy LLC because Rao is passionate about connecting clients to cost-effective solutions in energy consulting, storage, distributed energy resources, and electricity...

  • Member since 2014
  • 189 items added with 40,444 views
  • Jan 26, 2021
  • 482 views

These are my observations

  1. Unlike Southwest Power Pool (SPP), MISO stakeholders do not favor a general peanut butter approach (postage stamp method) of allocating transmission project costs across the entire MISO load. They want to see who benefits and only those should pay.
  2. MISO may be moving away from a portfolio-based Multi Value Project (MVP) cost allocation approach to a more project-specific approach in the future.
  3. We can expect more discussions around state’s role in resource adequacy, policies around clean energy goals, and how renewable generators sitting in the generator interconnection queue pay for network upgrade costs.

MISO Cost Allocation working group Scope

MISO stakeholder working group for allocating transmission costs is called Regional Economic Criteria Benefits (RECB) working group. The link provides 2021 WG scope.

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Source: cdn.misoenergy.org
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Matt Chester's picture
Matt Chester on Jan 26, 2021

Unlike Southwest Power Pool (SPP), MISO stakeholders do not favor a general peanut butter approach (postage stamp method) of allocating transmission project costs across the entire MISO load. They want to see who benefits and only those should pay.

Can you describe what the difference is between SPP and MISO stakeholders that make them take different approaches here? Is it related to their geographical/population characteristics that are unique from the other? 

Rao Konidena's picture
Rao Konidena on Jan 26, 2021

Any regional cost allocation principles at RTO level have in general similarities such as, they run production cost models to determine who benefits and in general estimate what does it cost - to determine the benefit to cost ratio.

The SPP and MISO differences in cost allocation, from my perspective - seem to be around the voltage threshold. For example, at MISO - any Multi-Value Project (all 3 drivers - policy, economics and reliability) are 100% postage stamped to load, but, this only applies to 100kV and above and $20 million project cost. (Reference: slide 3, https://cdn.misoenergy.org/MISO%20Regional%20and%20Interregional%20Cost%... )

However, at SPP, the higher voltage cut off is 300 kV. Projects higher than 300 kV are 100% cost allocated to regional load ratio share. Projects between 100 kV and 300 kV are 33% assigned to region and 67% to local zone. Projects less than 100 kV are 100% assigned to local zone. (Reference: page 107 here, https://spp.org/documents/31587/spp101%20-%20an%20introduction%20to%20sp... )

The SPP reference was kindly provided by Mr. Lee Elliott at SPP.

I hope this helps.

Matt Chester's picture
Matt Chester on Jan 26, 2021

That's quite helpful-- thanks for your insights and patience explaining it further, Rao!

Rao Konidena's picture
Thank Rao for the Post!
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