MISO chief sees settlement with SPP by summer

OREANDA-NEWS. February 10, 2015. A settlement to a protracted battle with the Southwest Power Pool (SPP) over the use of its transmission grid to transfer electricity from the Midcontinent Independent System Operator's (MISO) midwest area to the Gulf coast could come before summer, MISO president John Bear told an industry group.

Confidential settlement talks ordered last March by federal energy regulators between MISO and the southwest grid operator have produced "real progress," Bear said.

"I have every reason to believe by this summer we will have an agreement," he told a meeting sponsored by the Gulf Coast Power Association in New Orleans on 5 February.

The nearly year-old dispute between MISO and the adjacent SPP began when Entergy and other utilities in Arkansas, Louisiana, Texas and Mississippi joined MISO in late 2013. SPP complained to the Federal Energy Regulatory Commission (FERC) that it should be compensated for power flows that exceeded the capacity of a single 1,000MW transmission line between MISO's midwest and its new Gulf coast regions.

FERC ordered settlement talks, but state regulators and other observers have expressed little confidence that the talks would lead to a solution.

The dispute has escalated at FERC over MISO's response to impose a "hurdle rate" surcharge to offset unpaid transmission charges piling up from SPP. MISO and regulators want FERC to revisit its prior orders, as does the MISO independent market monitor who also called for settlement talks to end.

New market participants in MISO's south region say the unresolved issue prevents them from seeing all benefits of the MISO market.

MISO and the PJM Interconnection have struggled since 2013 to address seams problems. FERC chairwoman Cheryl LaFleur last month said she was considering setting a deadline for PJM and MISO to come up with a solution.

Bear said people ask why it has been so difficult for US grid operators to agree how to treat power flow across the seams.

"We all have had a different view of things," Bear said. "We have developed those views over 11, 12 years or longer. Working through those issues is going to take time."

MISO market monitor chief David Patton, speaking on a separate panel, said the dispute was over a "completely ridiculous constraint, a fiction created by FERC," that has raised prices for most customers in MISO south by \\$3/MWh.

Patton said a market-to-market coordination protocol set to begin 1 March should address the problem more economically.

Bear said MISO has delivered first-year benefits to MISO south well in excess of its \\$524mn estimate due to additional utilities that followed Entergy's lead to join MISO. "Overall, it is a pretty good story," Bear said.