In the January 26, 2024 Long Range Transmission Planning (LRTP) Workshop, MISO shared proposed methodology for congestion and fuel savings benefit metrics. Stakeholder feedback is requested on the methodology for defining reference case/change case and calculation of benefits.
Feedback is due by February 16, 2024.
MidAmerican Energy appreciates the opportunity to provide feedback on the Congestion and Fuel Savings Benefit metric calculation methodology. The current proposed methodology is consistent with the LRTP Tranche 1 methodology where the Congestion and Fuel Savings is calculated by calculating the APC difference between the Reference case and the Reference Case with LRTP Tranche 2 portfolio. We believe MISO should adhere to this methodology as it would enable a review of the Congestion and Fuel Savings incremental benefit from Tranche 1 to 2. We also believe that the APC cost models used for analysis provide conservative values for the congestion benefits because the transmission system is, for nearly all periods of time, in a state with more outages than the N-1 conditions assumed in MISO’s models (i.e., there is nearly always multiple planned and forced outages at any given point in time which can have significant impacts on congestion)
The Environmental Sector offers these comments in response to MISO’s request for feedback regarding congestion and fuel savings benefit metric for LRTP Tranche 2.
We support the methodology, reference case, and change case as proposed by MISO. LRTP’s scenario based planning rightly uses plausible bookend scenarios to identify a least regrets transmission portfolio that supports a number of economic and environmental benefits. It is also appropriate that MISO ensure all cases - including both reference and change cases - meet energy adequacy requirements. MISO has committed to using Future 2A to identify the Tranche 2 transmission portfolio and the 1.0 benefit to cost (B/C) ratio standard, however, the B/C ratio will also be calculated for the low bookend Future 1A. The proposed make-up of the reference case and change case, that can meet energy adequacy requirements, are appropriate to calculate the congestion and fuel savings benefits of LRTP Tranche 2 projects.
As an initial matter, WPPI appreciates that MISO’s presentation provided convenient links to previous discussion of LRTP benefit metrics. We found this very helpful.
However, we are concerned that MISO is repeating a fundamental error that the TDU Sector called out in point 3 of its comments on Tranche 1 (which are included here: https://cdn.misoenergy.org/MTEP21 LRTP Tranche 1 Portfolio626133.zip). That is, we are concerned that the reference-case resource mix MISO is assuming for the Congestion & Fuel Savings benefit will be inconsistent with the reference-case resource mix MISO will use in the Avoided Capacity Cost benefit that MISO will calculate in the future. Consistency among reference cases is necessary for a proper accounting of aggregate benefits, so inconsistency would be improper. Moreover, it appears that the proposed Congestion & Fuel Savings reference case is not realistic and thus improper even without comparison to other benefit analyses.
MISO proposes to use a reference case for the Congestion & Fuel Savings benefit calculation that includes the same resources as are included in Future 2A. In contrast, we expect that MISO will develop an alternative resource mix (and siting) to estimate the Avoided Capacity Cost benefit for Tranche 2, consistent with what MISO did in the Tranche 1 process, and that this resource mix will be much different. Assuming MISO indeed takes that approach, that benefit calculation will be incompatible with the Congestion & Fuel Savings benefit MISO describes in the presentation.
Even considered in isolation, the proposed Future 2A reference case for the Congestion & Fuel Savings benefit calculation is problematic. As MISO itself notes at slide 4 of the presentation: “Resources with ≥ 5% DFAX (enabled) on reliability constraints addressed by LRTP projects will likely not be able to connect.” That is, without Tranche 2 facilities, some combination of more capacity, more-local siting, more energy-storage resources and more gas-fired generation (relative to the Future 2A resource mix) would likely be needed to meet future electricity demand; put another way, addition of Future 2A generation without something like the expected accompanying Generator Interconnection Network Upgrades is not realistic. An unrealistic reference case will not yield meaningful Congestion & Fuel Savings estimates.
Logically, it appears to us that the appropriate approach would be to start with the Avoided Capacity Cost benefit and the corresponding alternative resource mix (and siting), and then make use of this hypothetical resource mix for estimating all the other benefits—particularly the Congestion & Fuel Savings benefit. That approach would allow for a meaningful assessment of the benefits of Tranche 2 projects and would provide consistency among MISO’s Tranche 2 benefit estimates.
WEC Energy Group supports the comments submitted by WPPI Energy regarding the congestion and fuel savings benefit metric for Tranche 2.
American Municipal Power (AMP) supports the feedback submitted by WPPI Energy.
Mississippi Public Service Commission (MPSC) Response LRTP: Tranche 2 Congestion and Fuel Savings Benefit Metric (20240126)
In the January 26, 2024, Long Range Transmission Planning (LRTP) Workshop, MISO shared proposed methodology for congestion and fuel savings benefit metrics. Stakeholder feedback is requested on the methodology for defining reference case/change case and calculation of benefits.
Feedback is due by February 16, 2024.
Feedback
The MPSC requests clarification on certain aspects of the presentation and offers feedback regarding the proposed metric:
1. Slide 4 –
a. What is meant by the statement that this metric is “a measure of APC savings… .” Is MISO proposing to adopt the APC metric calculation methodology to calculate Congestion and Fuel Savings from LRTP Tranche 2 Transmission?
b. Has MISO considered that natural gas-fired generators with take-or-pay gas contracts save no money when dispatched down to make room for the resources with lower or negative offer prices (e.g., renewable, nuclear off peak) enabled by LRTP transmission projects? Has MISO surveyed generator owners to determine how they purchase natural gas and whether there are actual fuel savings when their units are dispatched down?
c. What is meant by the statement, “The Reference Case will require all resources to meet Future 2A energy requirements (on copper sheet)”?
d. Does the term “energy requirements” refer to the forecast load of Future 2A?
e. Does the term “energy requirements” also include ancillary service needs imposed by the Future 2A resource mix?
f. What is meant by the statement “The Change Case includes all resources in the Futures”?
g. How does MISO reconcile the statement, “Resources with ≥ 5% DFAX (enabled) on reliability constraints addressed by LRTP projects will likely not be able to connect” to the statement on Slide 5 that states, “Energy adequacy requires all resources to be reflected in modeling of both change and reference case used to assess congestion and fuel savings benefits”?
2. The methodology to calculate the proposed Congestion and Fuel Savings Benefit Metric, the F2A Reference Case, and the F2A Change Case Models include the additional 29 GW of Flex capacity identified as needed for energy adequacy to address energy risks during twilight hours (Slide 4). The MPSC seeks to understand certain aspects of the Flex capacity:
a. Must this 29 GW of Flex capacity be able to provide firm energy and ancillary services needed to serve the BAA transmission needs?
b. Who is responsible for constructing the Flexible generation?
c. Who is responsible for paying for the Flexible generation?
d. What happens if the Flexible generation is not built in time?
e. What happens if the technology envisioned by MISO (zero emission dispatchable generation) does not exist when predicted by the model?
3. General Comment: In addition to the comments above, the MPSC notes that the presentation lacks the specifics necessary to fully understand MISO’s proposed metric. No real description of how the metric is calculated is provided other than the reference to APC savings. Until MISO addresses the issues described above, it is not possible to ascertain whether the benefits this metric would measure are real and consistent with OMS Policy and the ERSC Resolution.
It's not clear how congestion and fuel savings benefits are defined. Are they separate benefit metrics? If so, that is duplicative. This benefit component should be defined as Adjusted Production Cost Savings as calculated for Market Efficiency Projects in Attachment FF-7 Section 1.A of the MISO Tariff.
Alliant Energy supports the comments submitted by WPPI.