A settlement agreement has been filed at the Federal Energy Regulatory Commission (FERC) around transmission capacity usage and associated compensation to be paid to neighboring transmission systems – among them, Midcontinent Independent System Operator (MISO); Southwest Power Pool (SPP); and joint parties, including Southern Company, Tennessee Valley Authority (TVA), Associated Electric Cooperative (AECI), Louisville Gas and Electric (LG&E), Kentucky Utilities Company (KU) and PowerSouth Energy Cooperative.
If approved by FERC, the agreement provides the governance for continued shared use of the transmission system, in the interests of enabling more economical delivery of energy, while also providing compensation for that use.
The new pact solves a dispute that goes back to December 2013, when Entergy completed the integration of its Gulf Coast service area into MISO – and the Midwest system operator began making unauthorized use of the SPP transmission system, the Southwest regional network contends.
SPP argued in its complaint that MISO was violating their Joint Operating Agreement by sending power between the Midwest and South in excess of the 1,000-megawatt (MW) interconnection agreed to in Section 5.2 – and, thus, wass using SPP’s transmission system without reserving capacity or compensation.
Specifically, SPP asserts that “MISO does not have authority from the Commission or from the D.C. Circuit [Court] to place intentional, unscheduled flows on the SPP transmission system without an Open Access Same-Time Information System [OASIS] reservation and corresponding transmission service agreement.”
While SPP began invoicing MISO under the SPP Tariff for the unauthorized use of its system beginning on December 19, 2013, the regional network states that MISO has refused to pay a bill that is now in the neighborhood of $9 million. SPP maintains that acceptance of the agreement, subject to refund, will ensure that MISO’s use of the SPP system is treated comparably to service taken by all other customers.
In addition, the joint parties allege that MISO overbilled them by more than a total of $20 million in transmission rates since Entergy joined the system nearly two years ago.
The new agreement comprises several key provisions, in that it:
- Specifically creates a mechanism whereby MISO will compensate SPP and the joint parties for use of their systems. The level of compensation will be determined by the application of a capacity factor for flows above MISO’s existing 1,000 MW of contract path.
- Generally retains the capacity usage provision between MISO and SPP under their Joint Operating Agreement (Section 5.2) and establishes new provisions for certain usage going forward.
- Provides certainty for express operational transfer limits.
- Establishes an Operating Committee for all parties to manage issues that arise under the agreement.
“As the SPP region grows and we continue to modernize the electric grid, cooperation with our neighboring regions has never been more important,” said SPP CEO Nick Brown, adding, “I am pleased we were able to reach this agreement with MISO to ensure that our member companies and their customers are compensated for the use of the SPP transmission system. We also appreciate the work and support of the joint parties in helping us resolve this challenging and complex issue.”
“We are pleased to have reached a resolution that provides electricity savings to consumers across the MISO region and brings clarity to our members and all stakeholders,” said MISO CEO John R. Bear.