MTEP15 Chapter 8.2: Policy Studies – Interregional SPP

MTEP15 Chapter 8.2: Policy Studies – Interregional SPP

The MISO-Southwest Power Pool (SPP) Coordinated System Plan (CSP) Study jointly evaluated seams transmission issues and identified transmission solutions to the benefit of MISO and SPP. This study incorporated two parallel efforts:

  • Economic evaluation of seams transmission issues
  • Assessment of potential reliability violations

The CSP study, beginning January 2014, concluded on June 30, 2015. This chapter will provide a high-level summary of the analysis performed by MISO and SPP staff. Additional details can be found in the MISO-SPP CSP Coordinated System Plan Study Report. With approval from the Interregional Planning Stakeholder Advisory Committee (IPSAC) and the Joint Planning Committee (JPC), three potential Interregional Projects showing benefits to both MISO and SPP were recommended for regional review. The following projects will be evaluated in both the MISO and SPP regional planning processes:

  • Elm Creek to NSUB 345 kV
  • Alto Series reactor
  • South Shreveport – Wallace Lake 138 kV rebuild.

MISO’s regional review process is underway and updates will be presented at the Planning Advisory Committee (PAC) meetings. MISO is targeting a completion date of the regional review process to be in October 2015. The scope of the regional review conducted by MISO staff can be found toward the end of this chapter. SPP’s regional review process updates will be presented at their Economic Studies Working Group (ESWG) with a target completion date in October 2015l. Upon completion of the regional review processes, potential Interregional Projects may advance to both the MISO’s and SPP’s Board of Directors for project approval and interregional cost allocation.

Background

As part of the pending FERC-filed MISO-SPP Joint Operating Agreement (JOA), and in an effort to enhance interregional coordination and plan transmission efficiently, MISO and SPP conducted a joint annual issues review with stakeholders. The IPSAC met on January 21, 2014, and the general consensus from stakeholders was that there are many transmission issues needing evaluation. The range of issues include:

  • Congestion
  • Integration of the MISO South region
  • Expanded market operation by SPP
  • Real-time operational issues
  • Reliability issues
  • Public policy requirements

The JPC, during the development of the CSP scope, took into consideration those proposed issues. After further review with stakeholders the study scope was finalized in June 2014.

The proposed Order 1000 interregional coordination procedures, pending at FERC, were used to guide the process for this study. Previous coordinated efforts included development of a joint future that included discussions around the uncertainty variables in a joint and common model coincident in both the MISO and SPP planning processes. This joint study provided an initial effort to enhance interregional coordination, to jointly evaluate seams transmission issues, and to identify efficient transmission solutions to the benefit of both MISO and SPP.

Economic Evaluation and Issues Identification

The JPC reviewed 34 transmission issues submitted by stakeholders for study consideration. In addition to the submitted transmission issues, the JPC included in the study scope an evaluation to review economic congestion utilizing historical top congested flowgates from market reports and projected congestion resulting from the joint economic model developed for this study effort.

The projected congestion analysis identified the top congested flowgates based on the 2024 CSP Study model (Table 8.2-1). The flowgates were ranked using these indicators:

  1. Binding Hours — number of hours in a year the flowgate binds
  2. Shadow Price — reduced production cost for 1 MW increase of thermal rating on the flowgate
  3. Congestion Costs — flowgate shadow price multiplied by MW flow on the flowgate
Issue Id Constraint Name Contingency
M-1 Frederick Town AECI – Frederick Town AMMO 161 kV Lutesville – St. Francois 345 kV
S-2 North East – Charlotte 161 kV Iatan – Stranger 345 kV
M-5 Blue Earth – Winnebago 161 kV Lakefield Junction – Lakefield 345 kV
M-6 Wapello 161/69 kV Transformer T1 Wapello 161/69 kV Transformer T2
M-9 Prairie 345/230 kV Transformer T2 Prairie 345/230 kV Transformer T1
M-10 Swartz – Alto 115 kV Baxter Wilson – Perryville 500 kV
M-11 Reed – Dumas 115 kV Sterlington – El Dorado 500kV
S-12 Essex – Idalia 161 kV Essex – New Madrid 345 kV
M-13 Grimes – Mt Zion 138 kV Grimes – Ponderosa 230 kV
S-14 South Shreveport – Wallace Lake 138 kV Dolet Hills 345/230 kV Transformer
Table 8.2-1: MISO-SPP Coordinated System Plan Economic Issues List

Economic Transmission Solution Development

The historical and projected congestion analysis, combined with the issues submitted by stakeholders, guided the development of transmission solution ideas evaluated as potential MISO-SPP Interregional Projects. The solution development and evaluation focused on the set of identified congested flowgates that captured a majority of congestion costs (e.g., greater than 70 percent).

RTO staff and stakeholders could propose transmission solutions to address the identified transmission issues. Solutions were solicited through the MISO-SPP IPSAC meetings.

MISO and SPP staffs solicited a request for stakeholders to submit potential projects addressing congestion identified in the issues list presented at the October 7, 2014, IPSAC meeting. Stakeholders submitted a total of 39 projects addressing approximately 75 percent of the issues posted. In addition to stakeholder submissions, staff submitted 15 additional projects for consideration.

A preliminary screening analysis performed on all proposed transmission solution ideas determined the solution ideas with the greatest potential that warranted further evaluation. All consolidated transmission solution ideas and all transmission solution ideas with potential value were evaluated for adjusted production cost (APC) benefits to MISO and SPP.

The screening index was calculated by using results of model year 2024 of APC benefits compared to that model year’s project costs. If the screening index was at least .5 and the project provided significant benefits to both MISO and SPP, the project passed screening.

These projects passed the screening process:

  • St. Francois – Fletcher 345 kV
  • St. Francois – Taum Sauk – Fletcher 345 kV
  • Walker Tap – Rivtrin 138 kV
  • Series Reactor on Alto – Swartz 115 kV
  • S. Shreveport – Wallace Lake 138 kV
  • Elm Creek – Mark Moore 345 kV
  • Elm Creek NSUB 345 kV

Benefit-to-Cost Analysis

To calculate an indicative benefit-to-cost ratio for proposed transmission solutions, a 20-year net present value calculation of benefits and costs was used[1]. Benefits were calculated by the change in APC with and without the proposed Interregional Project. The APC accounted for purchases and sales. The APC benefit metric was calculated for the simulated years 2019 and 2024. Benefit calculations for intermediary years used interpolation and years beyond 2024 used extrapolation. The period covered by the benefit and cost calculation was 20 years, starting with the project’s in-service year.[2] The annual costs were calculated using an average carrying cost of existing Transmission Owners in MISO and SPP. The present value calculation assumed an 8 percent discount rate (Table 8.2-2).

Project Description NPV Project Cost (2015-M$) B/C Ratio Benefit: MISO% Benefit: SPP%
Walker Tap ‑ Rivtrin 138 kV $48.7 1.05 117% -17%
St Francois ‑ Fletcher 345 kV $113 .51 88% 12%
Elm Creek – Mark Moore 345 kV $156.3* 1.03 7% 93%
Elm Creek – NSUB 345 kV $133.8* 1.22 20% 80%
Series Reactor on Alto – Swartz 115 kV $5.4* 4.32 86% 14%
S Shreveport ‑ Wallace Lake 138 kV $17.7* 2.61 80% 20%

*Denotes study level cost estimates (+/- 30%)

Table 8.2-2: Results of Benefit-to-Cost Analysis

Sensitivity Analysis

After receiving input from stakeholders, the study scope included a high natural gas price, carbon price and modeling of the Sub-Regional Power Balance Constraint as sensitivities. Additional analyses were performed on projects being considered for recommendation by the JPC using the three sensitivities. The proposed Interregional Projects identified in the assessment utilizing the Business As Usual Future were evaluated using the three sensitivities to determine how the projects perform under these scenarios. Results from the sensitivities were informational only and did not have an impact on the benefit split between MISO and SPP or the final calculated benefit-to-cost ratio.

With input from the IPSAC, the JPC set the high natural gas price to $8.66/MMBtu for 2024 and the carbon price to $64/ton in 2024.

The potential change in APC benefits for each project are the results of a one-year analysis utilizing the 2024 model (Table 8.2-3). As an example, the High Natural Gas Price Sensitivity indicated that the benefits attributed to the project Series Reactor on Alto – Swartz would increase by 43 percent if the gas price was set to $8.66/MMBtu.

Project Description % Change in APC Benefits (MISO and SPP combined)
High Natural Gas Price Carbon Tax SRPBC
Series Reactor on Alto – Swartz 115 kV +43% +37% +73%
S Shreveport ‑ Wallace Lake 138 kV -79% -58% -39%
New Elm Creek – Mark Moore 345 kV +52% -62% -7%
New Elm Creek – NSUB 345 kV +54% -67% -7%
Table 8.2-3: Sensitivity Analysis Results

Reliability Assessment

The reliability assessment in this scope included multiple studies. This multi-faceted approach allowed MISO and SPP to evaluate various transmission issues near the MISO-SPP seam. The phases of the reliability assessment included in the CSP study were:

  • Review of reliability projects near the seam, identified in the respective regional planning processes of MISO and SPP, to determine if there were interregional alternatives to the currently proposed transmission solutions
  • A steady-state assessment using jointly developed powerflow models consistent with reliability processes used by each region
  • A dynamics assessment to test system stability using a light load powerflow case

Solutions to address the identified reliability issues were developed and reviewed in coordination with the respective regional planning processes. These solutions, which may include alternative projects that more effectively mitigate identified issues, were submitted by:

  • Respective RTO staff
  • Stakeholders through regional planning processes
  • Stakeholders through MISO-SPP IPSAC meetings

Transmission solutions to address identified reliability issues were evaluated to determine the most efficient and cost-effective method for the identified constraints. Projects addressing reliability issues were also evaluated for potential economic benefits to MISO and SPP. The projects identified to address the identified reliability issues were not found to provide substantial economic benefit to MISO or SPP in the context of this study scope.

Steady State Contingency Analysis

An N-1 contingency analysis was conducted using a joint powerflow model. The joint model merged the most recent powerflow cases used in the MISO and SPP regional planning processes. Specifics of the model development process can be found in the MISO-SPP Coordinated System Plan Study Report.

Issues Assessment

MISO and SPP staff compared criteria used in their respective regional planning processes to develop a methodology for use in the CSP study. Criteria used to determine the potential violations were:

  • Monitored
    • Facilities 100 kV and above in the MISO and SPP footprints
    • Thermal overloads greater than 100 percent
    • Base case voltages below .95 pu
    • Contingency voltages below .90 pu
    • More stringent local planning criteria
  • Contingencies
    • Full N-1
    • MISO and SPP Category B contingencies submitted by stakeholders

MISO and SPP jointly performed separate base-case (N-0) and contingency (N-1) analyses that provided a list of potential thermal and voltage violations (Table 8.2-4; Figure 8.2-1).

Needs Overall Unique MISO System SPP System
Overloads 50 18 14 4
Low Voltages 84 34 31 3
Table 8.2-4: Steady-state thermal and voltage issues

MISO and SPP jointly performed separate base-case (N-0) and contingency (N-1) analyses that provided a list of potential thermal and voltage violations. The results were compared and verified. Engineering judgment was used to filter out issues not electrically close to the seam. This initial issues list was provided to stakeholders along with a request for potential solutions to address the potential violations. After stakeholder feedback and additional validation was completed a final issues list was created (Table 8.2-4; Figure 8.2-1).

Figure 8.2-1: Map of steady-state thermal and voltage issues

Figure 8.2-1: Map of steady-state thermal and voltage issues

MISO and SPP requested stakeholders submit any potential solutions that could address any of the listed issues. Staff received 12 project submissions from stakeholders. In addition to stakeholder-submitted projects, MISO and SPP staff leveraged previously identified regional projects from the MTEP and ITP processes, respectively. MISO and SPP analyzed these regional projects to determine if they addressed the issues identified in the CSP.

MISO and SPP evaluated projects to determine:

  • If benefit was provided to both MISO and SPP
  • If thermal overloads were solved to under 100 percent
  • If base case voltages were solved to within applicable planning criteria
  • If contingency voltages were solved to within applicable planning criteria
  • If interregional solutions were more cost effective than MISO and SPP regional projects

The transmission solution evaluation phase of the steady state assessment did not yield any Interregional Projects that were more cost-effective or efficient than previously identified regional solutions.

Dynamic Assessment

The dynamics assessment utilized a joint model developed from MISO’s and SPP’s regional models in a similar approach to the joint model used for the steady-state assessment. A 2019 light-load case was developed in an effort to highlight seasonal transient instability issues most likely to occur. MISO and SPP selected areas to be monitored that were adjacent to the MISO-SPP seam (Table 8.2-5).

SPP Areas MISO Areas
515 SWPA 645 OPPD 333 CWLD 600 XEL
520 AEPW 650 LES 356 AMMO 635 MEC
523 GRDA 652 WAPA 360 CWLP 615 GRE
536 WERE 608 MP 327 EES-EAI
540 GMO 613 SMMPA 332 LAGN
541 KCPL 620 OTP 351 EES
542 KACY 661 MDU 502 CLEC
544 EMDE 627 ALTW 503 LAFA
546 SPRM 633 MPW 504 LEPA
640 NPPD 694 ALTE
Table 8.2-5: Areas modeled in Dynamics Assessment

The study used POM-TS’s Fast Fault Screening (FFS) Tool to determine disturbances. The POM-TS FFS takes a single set of contingencies (N-1) and determines a severity ranking index (RI) and a critical clearing time (CCT). The ranking index takes into account kinetic energy, torque and voltage deviations to determine a score. A shorter clearing time and higher severity index score indicate a more severe disturbance. Contingencies resulting in a CCT of less than nine cycles to clear were chosen for further evaluation.

Study results showed that no instability was found for the simulated events. All machines were stable with good oscillation damping and bus voltages were within tolerances. Detailed results of the disturbances can be found in the MISO-SPP Coordinated System Plan Study Report.

Review of Regional Projects

MISO and SPP staff reviewed reliability projects from their respective regional processes. No regional projects of either RTO were identified as replacing the need for a project in the other respective regional process. Additionally there were no regional projects that could be replaced by an Interregional Project.

No-harm Test on Economic Projects

Interregional projects identified to address congestion were evaluated to ensure they do not create reliability issues. The evaluation may result in the modification of the Interregional Project or identification of additional interregional facilities that are needed to mitigate the projected reliability issue.

After the conclusion of the no-harm evaluation for the four economic projects considered, it was determined that no new reliability issues were identified due to the inclusion of the economic projects and that no mitigations were needed.

In addition to running each of the tested projects individually, they were analyzed as a group and again no new reliability issues were identified due to the inclusion of the projects as a group.

Recommended Interregional Projects

Based on the results of the economic assessment, MISO and SPP identified three projects for consideration as potential Interregional Projects:

  • Elm Creek to NSUB 345 kV
  • Alto Series reactor
  • South Shreveport – Wallace Lake 138 kV rebuild

Each of these projects individually demonstrate benefit to both MISO and SPP as well as APC benefits that exceed the costs of the projects over the initial 20 years of the project life.

Interregional Cost Allocation

As agreed to by MISO and SPP, and accepted by FERC, MISO and SPP used the APC benefit metric to allocate the costs to each planning region of proposed Interregional Projects addressing primarily economic congestion.

If the recommended Interregional Projects are approved by both the MISO and SPP Board of Directors, the costs will be allocated between MISO and SPP (Table 8.2-8).

Project E&C Cost M$ MISO Cost % SPP Cost %
Elm Creek – NSUB 345 kV $140.7 20% 80%
Alto Series Reactor 115 kV $5.3 86% 14%
S. Shreveport – Wallace Lake 138 kV Rebuild $18.5 80% 20%
Table 8.2-8: Interregional cost allocation for potential MISO-SPP Interregional Projects

Regional Review Process Results

Editor’s Note: this information will be included at a later date as analysis is ongoing.

FERC Order 1000

On February 19, 2015, the MISO-SPP interregional FERC Order 1000 filing was conditionally accepted at FERC, subject to a further compliance filing date of August 18, 2015. FERC directed MISO and SPP to propose a cost allocation methodology for interregional transmission facilities addressing regional transmission needs driven by public policy. FERC also directed MISO to adopt SPP’s proposed methodology of using a combination of avoided cost and adjusted production cost benefits for interregional transmission facilities addressing regional reliability needs.

MISO, SPP and their stakeholders collaboratively developed language to address all FERC compliance directives. The updated Joint Operating Agreement language was filed on August 18, 2015. MISO and SPP agreed to use an avoided cost plus adjusted production cost methodology for reliability driven Interregional Projects and to use an avoided cost methodology for public policy driven Interregional Projects. MISO and SPP maintained the previously accepted adjusted production cost methodology for economically driven Interregional Projects.

  • Alto Series reactor
  • South Shreveport – Wallace Lake 138 kV rebuild

Each of these projects individually demonstrate benefit to both MISO and SPP as well as APC benefits that exceed the costs of the projects over the initial 20 years of the project life.

Interregional Cost Allocation

As agreed to by MISO and SPP, and accepted by FERC, MISO and SPP used the APC benefit metric to allocate the costs to each planning region of proposed Interregional Projects addressing primarily economic congestion.

If the recommended Interregional Projects are approved by both the MISO and SPP Board of Directors, the costs will be allocated between MISO and SPP (Table 8.2-8).

 

Project E&C Cost

M$

MISO Cost % SPP Cost %
Elm Creek – NSUB 345 kV $140.7 20% 80%
Alto Series Reactor 115 kV $5.3 86% 14%
S. Shreveport – Wallace Lake 138 kV Rebuild $18.5 80% 20%
Table 8.2-8: Interregional cost allocation for potential MISO-SPP Interregional Projects

Regional Review Process Results

Editor’s Note: this information will be included at a later date as analysis is ongoing.

FERC Order 1000

On February 19, 2015, the MISO-SPP interregional FERC Order 1000 filing was conditionally accepted at FERC, subject to a further compliance filing date of August 18, 2015. FERC directed MISO and SPP to propose a cost allocation methodology for interregional transmission facilities addressing regional transmission needs driven by public policy. FERC also directed MISO to adopt SPP’s proposed methodology of using a combination of avoided cost and adjusted production cost benefits for interregional transmission facilities addressing regional reliability needs.

MISO, SPP and their stakeholders collaboratively developed language to address all FERC compliance directives. The updated Joint Operating Agreement language was filed on August 18, 2015. MISO and SPP agreed to use an avoided cost plus adjusted production cost methodology for reliability driven Interregional Projects and to use an avoided cost methodology for public policy driven Interregional Projects. MISO and SPP maintained the previously accepted adjusted production cost methodology for economically driven Interregional Projects.


[1] There is not a B/C ratio requirement in the CSP study.

[2] Initially MISO and SPP have made the assumption that the in-service date for all projects is 2024.

[3] There is not a B/C ratio requirement in the CSP study.

[4] Initially MISO and SPP have made the assumption that the in-service date for all projects is 2024.