Five Changes Coming to the MISO Generator Interconnection Procedures
MISO’s Generator Interconnection Procedures are changing (again). In the tradition of New Year’s resolutions, MISO proposed Tariff changes on New Year’s Eve 2015, resolving to improve its interconnection process in 2016 (Docket No. ER16-675). This filing marks MISO’s fourth set of revisions since 2008, and, like all New Year’s resolutions, only time will tell whether good intentions lead to lasting improvements. Comments on MISO’s proposal were due by Jan. 29, 2016.
Five main resolutions from MISO’s latest proposal follow:
1. Slim down in 2016.
MISO will subdivide its study process and add “off-ramps” to reduce the number of projects being studied and to give projects more flexibility to exit and more certainty if they proceed. MISO’s new study process seeks to minimize cascading restudies caused by project withdrawals by subdividing the Definitive Planning Phase (DPP), the phase where Interconnection Studies occur, into three parts and providing two “off-ramps” to exit the study process with some milestone payments refunded.
To reduce the chronic study delays caused by the withdrawal of higher-queued projects that trigger “cascading restudies” for lower-queued projects, MISO would divide its DPP into three phases (I-III). Aliff Testimony at 16 & Attach. A. Each DPP Phase will provide an incrementally more accurate System Impact Study (SIS): (i) a preliminary SIS in DPP Phase I, (ii) a revised SIS in DPP Phase II, and (iii) a final SIS in DPP Phase III. Id. To increase certainty in each phase, MISO’s process would encourage withdrawals at two defined “off-ramps” (Decision Points I and II) at the end of DPP Phases I and II. Id. at 17. By integrating ongoing restudy after these Decision Points, MISO hopes to increase certainty as it reduces the number of projects in the queue. MISO’s Facility Studies will follow the final SIS in DPP Phase III, after which MISO will tender a draft pro forma GIA to each project. Id. at 21.
MISO’s three DPP Phases are also intended to eliminate the “overlap” of studies because MISO will not start a new study “cycle” until one cycle of DPP Phases I-III is complete. Id. at 21-22. For example, MISO would begin DPP Phase III of Cycle 2 only after all projects in Cycle 1 have i) executed GIAs, ii) requested MISO to file the unexecuted GIA with FERC, or iii) withdrawn their project and MISO has determined no restudy was required.
2. Meet your deadlines.
Milestone payments provide deadlines and refund incentives to exit at “off-ramps.” As an incentive to use the new Decision Point I and II off-ramps, MISO will add new milestone payments and will make two milestones (the existing M2 milestone and a new M3 milestone) refundable if a project uses an off-ramp. MISO will retain the M2 Milestone but will modify its timing and calculation (see Resolution 3 below). See Aliff Testimony at 27 & Attach. A. The new milestones, M3 and M4, will be required before a project can enter the last two DPP Phases. Therefore, a project will make a milestone payment to enter each DPP Phase: the M2 Milestone to enter DPP Phase I, the M3 Milestone to enter DPP Phase II, and the M4 Milestone to enter DPP Phase III. The new M3 and M4 milestones will be calculated using the formula currently used for the M2 milestone, which accounts for the interconnecting zone’s schedule 7 $/MW year long-term firm point-to-point transmission service rate, the MW size of the facility, and the number and cost of constraints. See id. at 29-30; Proposed GIP secs. 184.108.40.206.1 and 220.127.116.11.1. MISO would provide a 100 percent refund of the prior Milestone Payment as an incentive for the project to withdraw at two off-ramps after Phases I and II. Id. at 17 & Attach. A.
With the M2 and M3 milestone refunds providing an incentive, MISO anticipates that these off-ramp deadlines will encourage unready projects to exit the process earlier, thereby increasing the certainty for projects that remain. Assuming that projects withdraw earlier, each DPP phase will give the remaining projects increasingly better information to help them decide whether to continue or to withdraw at the next deadline. See id. at 22.
3. Set up an easy payment plan.
ISO would change the amount and timing of the M2 milestone. MISO proposes replacing the current M2 formula calculation with a flat fee of $5,000 per MW of new gross nameplate capacity, based on the rationale that it reflects the average M2 amount collected across all projects, regardless of size, since the implementation of the M2 milestone in 2012. Id. at 27. MISO found that the M2 milestone has not served a deterrent purpose, since projects remain in the queue as long as possible because the milestone was only refundable if MISO found no harm to lower-queued projects. Id. at 26. MISO’s proposal would also move the due date for the M2 Milestone payment up by 15 Calendar Days, from 30 Calendar Days prior to the commencement of the DPP cycle to 45 Calendar Days before DPP Phase I. MISO notes that the 45 Calendar Day deadline coincides with the date when all materials for an Interconnection Request to enter the DPP are due. Id. at 27.