Chapter 2.2 Cost Sharing Summary

Chapter 2.2 Cost Sharing Summary

New MTEP15 Appendix A Cost-Shared Projects

MTEP15 recommends a total of four new cost-shared projects, with a total project cost of $90.3 million for inclusion in Appendix A. The four cost-shared projects include:

  • Three Generator Interconnection Projects (GIP) with a total project cost of $22.9 million, with $2.0 million allocated to load and the remaining $20.9 million allocated directly to generators[1]
  • One Market Efficiency Project (MEP) with a total project cost of $67.4 million

MISO employs a collection of cost allocation mechanisms that seek to match the costs of transmission investment to those who benefit from that investment (Chapter 5.1, Table 5.1-1).

Cost Allocation Between Planning Areas For GIPs and MEPs

With the integration of the MISO South region on December 19, 2013, a cost allocation transition period started that determines how approved cost-allocated projects are shared amongst the pricing zones in the MISO North/Central and MISO South planning areas. The transition period concludes when certain Tariff criteria are met, likely in MTEP19.[2] The cost-shared projects in MTEP15 all terminate exclusively in the MISO North/Central planning area, and are cost shared amongst the MISO North/Central planning area pricing zones (Table 2.2-1).

Type and Location of Project Approved Before Transition Period pproved and/or Identified During Transition Period Approved After Transition Period Ends
Treatment During Transition Period Treatment After Transition Period Treatment During Transition Period Treatment After Transition Period
GIPs and MEPs terminating exclusively in one Planning Area Within North/Central Planning Area Within North/Central Planning Area Within applicable Planning Area Within applicable Planning Area Applicable to both Planning Areas
GIPs and MEPs terminating in both Planning Areas Not Applicable Not Applicable Applicable to both Planning Areas Applicable to both Planning Areas Applicable to both Planning Areas
Table 2.2-1: Cost-shared GIP and MEP transition period Tariff provisions

Cumulative Summary of All Cost-Shared Projects Since MTEP06

A total of 161 projects have been eligible for cost sharing since cost-sharing methodologies were first incorporated into the MTEP process. Cost sharing began in 2006 with Baseline Reliability Projects[1] (BRP) and GIPs and was later augmented with MEPs in 2007 and Multi-Value Projects (MVP) in 2010. Starting with MTEP13 and going forward, the costs for BRPs were removed from cost sharing and allocated to the pricing zone of the project location. The cost-shared projects represent $9.9 billion in transmission investment, excluding projects that have been subsequently withdrawn or had a portion of project costs allocated directly to generators for GIPs (Figure 2.2-1 and Table 2.2-2). The distribution of cost-shared projects includes:

  • Baseline Reliability Projects (BRP) — 76 projects, $3.127 billion
  • Generation Interconnection Projects (GIP) — 65 projects, $283 million (excluding the portion of project costs allocated directly to the generator)
  • Market Efficiency Projects (MEP) — three projects, $81 million
  • Multi-Value Projects (MVP) — 17 projects, $6.389 billion

Figure 2.2-1: MTEP cumulative cost sharing by project type ($millions)

 

Cost-Shared Project Type BRP GIP MEP MVP Total
A in MTEP06 $672.5 $16.0 - - $688.5
A in MTEP06 $672.5 $16.0 - - $688.5
A in MTEP07 $86.0 $16.6 - - $102.6
A in MTEP07 $86.0 $16.6 - - $102.6
A in MTEP08 $1,307.7 $11.8 - - $1,319.5
A in MTEP08 $1,307.7 $11.8 - - $1,319.5
A in MTEP09 $168.0 $63.2 $5.6 - $236.8
A in MTEP09 $168.0 $63.2 $5.6 - $236.8
A in MTEP10 $43.7 $1.5 - $510.0 $555.2
A in MTEP10 $43.7 $1.5 - $510.0 $555.2
A in MTEP11 $382.1 $46.6 - $5,879.4 $6,308.1
A in MTEP11 $382.1 $46.6 - $5,879.4 $6,308.1
A in MTEP12 $466.9 $106.8 $8.0 - $581.7
A in MTEP12 $466.9 $106.8 $8.0 - $581.7
A in MTEP13 - $3.0 - - $3.0
A in MTEP13 - $3.0 - - $3.0
A in MTEP14 - $15.1 - - $15.1
A in MTEP14 - $15.1 - - $15.1
A in MTEP15 - $2.0 $67.4 - $69.4
A in MTEP15 - $2.0 $67.4 - $69.4
Total $3,126.9 $282.6 $81.0 $6,389.4 $9,879.9

Table 2.2-2: MTEP06 to MTEP15 cost-shared project costs by MTEP cycle and project type
(shown in $millions)

Cost allocation methods vary depending on the classification of the project. For BRPs, GIPs and MEPs, the majority of the costs are allocated to the pricing zone where the project is located (see Chapter 5.1 for more information on project cost allocation).Of the $3.50 billion in approved costs for these project types (not including MVPs), approximately 66.2 percent ($2.3 billion) is allocated to the pricing zone where the project is located. The remaining 33.8 percent ($1.2 billion) is allocated to neighboring pricing zones or to all pricing zones system-wide.The total project cost allocated to each pricing zone for BRPs, GIPs and MEPs are broken down into two components: the portion of costs for projects located outside the pricing zone (Table 2.2-3, Column 3) and the portion of costs for projects located within the pricing zone (Column 4). Column 2 provides the total project cost of approved BRPs, GIPs and MEPs that are located in the pricing zone. The values shown in Figure 2.2-3 exclude the portion of GIPs assigned directly to the generator.

66.2 percent ($2.3 billion) of BRP, GIP and MEP remains in the pricing zone where the project is located with the remaining 33.8 percent ($1.2 billion) allocated to neighboring pricing zones or system-wide to all pricing zones

Pricing Zone Total Approved Cost Shared Transmission Investment Costs Allocated for Projects Located Outside Pricing Zone Costs Allocated for Projects Located within the Pricing Zone Total Project Cost Allocated to Pricing Zone
[1] [2] [3] [4] [5] = [3] + [4]
AMIL $151.9 $42.3 $125.5 $167.8
AMMO $84.3 $32.0 $78.4 $110.4
ATC $944.9 $89.6 $786.2 $875.8
BREC $5.2 $5.5 0.3 $5.8
CLEC 0.0 0.0 0.0 0.0
CWLD 0.0 $1.0 0.0 $1.0
CWLP $7.1 $1.7 $7.0 $8.7
DPC $18.8 $4.0 $8.9 $12.9
DUK $46.0 $113.3 $41.8 $155.1
EATO 0.0 0.0 0.0 0.0
ELTO 0 0 0 0
EMTO 0.0 0.0 0.0 0.0
ETTO 0.0 0.0 0.0 0.0
FE $16.6 $37.4 $14.7 $52.1
GRE $201.7 $28.6 $9.8 $38.4
HE $14.8 $13.0 $0.4 $13.4
IPL $18.9 $24.9 $3.9 $28.8
ITC $186.4 $42.2 $163.0 $205.2
ITCM $153.7 $53.1 $128.6 $181.7
LAFA 0.0 0.0 0.0 0.0
MDU $9.4 $9.9 $9.2 $19.1
MEC $0.6 $6.5 0.0 $6.5
METC $438.0 $89.9 $425.5 $515.4
MI13AG $0.9 $1.9 $0.7 $2.6
MI13ANG 0.0 $2.7 0.0 $2.7
MP $135.7 $105.9 $37.5 $143.4
MPW 0.0 $0.2 0.0 $0.2
NIPS $21.5 $25.9 $20.4 $46.3
NSP $593.7 $305.2 $328.2 $633.4
OTP $187.1 $116.4 $52.2 $168.6
SIPC 0.0 $1.9 0.0 $1.9
SME 0.0 0.0 0.0 0.0
SMMPA $50.0 $19.1 $4.0 $23.1
VECT $203.4 $6.3 $64.0 $70.3
Total $3,490.6 $1,180.4 $2,310.2 $3,490.6

For the approved portfolio of MVPs, the costs are allocated 100 percent region-wide and recovered from customers through a monthly energy charge calculated using the applicable monthly MVP Usage Rate. The MVP charge will apply to all MISO load, excluding load under grandfathered agreements and export and wheel-through transactions sinking in Pennsylvania-based PJM Interconnection.

Indicative annual MVP Usage Rates[1] (dollar per MWh) are based on the approved MVP portfolio using current estimated project costs and in-service dates. The MVP usage rates have been calculated for the period 2016 to 2055 and are shown by the blue line (Figure 2.2-2).[2] The red and green lines in Figure 2.2-2 represent an average of the estimated MVP Usage Rates over 20 and 40 year periods. For the average residential household that uses 1,000 kWh each month, the estimated monthly cost for MVPs averages to $1.73 per month over the next 20 years.

For the average residential household that uses 1,000 kWh each month, the estimated monthly cost for MVPs averages to $1.73 per month over the next 20 years

Figure 2.2-2: Indicative MVP usage rate for approved MVP portfolio from 2016 to 2055

Figure 2.2-2: Indicative MVP usage rate for approved MVP portfolio from 2016 to 2055


[1] The MVP Usage Rate is charged via Schedule 26-A to: 1) Export and Through-Schedules excluding deliveries sinking in PJM; and 2) Monthly Net Actual Energy Withdrawals, excluding those Monthly Net Actual Energy Withdrawals provided under GFAs. For Withdrawing Transmission Owners with obligations for approved Multi-Value Projects those charges are recovered through Schedule 39

[2] The annual estimated MVP Usage Rates for 2016 to 2055 shown in Figure 2.2-2 are included in Appendix A-3. Additional information on the indicative annual MVP Usage Rates, including indicative annual MVP charges by Local Balancing Authorities can be found on the MISO website.