Review of Postage Stamp
Cost Allocation
RECB
2/16/2017
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Overview
Objective
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For discussion purposes, provide
stakeholders an adequate approach
and list of studies to review so that
RECB can evaluate the adequateness
of postage stamp cost allocation
Key Takeaways
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Is not another stand alone separate
technical analyses
Will not re-evaluate approved projects
Ties to the MEP Strawman: Remove
postage stamp allocation MEP costs
Background
2015 Cost Allocation Issue Summary Paper
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In December 2013, MISO’s geographic footprint increased significantly with the
integration of the MISO South region. MISO’s footprint now stretches from the
Canadian border to the Gulf of Mexico. As a result, the granularity with which
existing beneficiaries are determined and/or costs are allocated should be reviewed
to assure it is consistent with the expanded footprint.
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Due to the increase in MISO’s geographic scope, it is timely to reevaluate whether
the footprint-wide postage stamp cost allocation for 20% of MEP costs remains fair
and equitable. Absent MISO South transition period provisions (discussed below),
20 percent of MEP costs are postage stamped to the entire MISO footprint.
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Due to the increase in MISO’s geographic scope, consideration should be given to
the 20 percent portion of MEP costs and if it should continue to be postage stamped
footprint wide or if a more granular sub regional approach would be more
appropriate.
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Reconsideration of postage stamp is also essential if the MEP 345 kV voltage
threshold is lowered.
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Background
2016 MEP Cost Allocation Strawman
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Remove footprint wide postage stamp allocation of costs for MEPs going
forward
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Include necessary analysis to justify removal and/or expansion to new footprint
Rationale
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Accommodates issues of MISO’s increased geographic size by only
allocating costs to analyzed benefitting zones
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Align costs with those receiving quantifiable benefits via analysis
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More straightforward to understand and administer
Risk Management
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Perform additional or replicate similar analyses from previous RECB to
better understand the spread of benefits or transmission usage with new
footprint
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Next Steps
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Instead of conducting more analyses, which
takes significant additional resources, MISO
proposes to conduct a review of past analyses
results to provide meaningful policy discussions
Potential List of Studies to Review
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2016/2017 Bassline Reliability Project (BRP) Informational Filing
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4 MEP projects
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MTEP09 ($5.6M Coffeen - Coffeen North 345 kV project)
MTEP12 ($5.3M project)
MTEP15 ($67.4M Duff-Coleman 345kV)
MTEP16 ($108M Huntley-Wilmarth 345kV)
17 MVP projects
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While BRP’s don’t use APC benefit metrics, it does gives indication of flow impacts
outside local area using Line Outage Distribution Factor (LODF) which may be
useful before embarking on reviewing MCPS/MEP/MVP type of studies
MTEP10/MTEP11
2014 MVP Triennial Review
2015/2016 MVP Limited Reviews
Past MCPS Studies
Others?
Discussion
What should we review from these
past study results to help us evaluate
postage stamp cost allocation?
Below is a list of MCPS and MVP Review study components, that may have been listing results by zones, footprint,
maybe even across footprint.
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Economic evaluation (APC)
Congestion relief results
Robustness testing
Public policy assessments
Congestion and fuel savings
Operating reserves
Planning reserve margin requirements
Transmission line losses
Wind turbine investment
Future transmission investment
Qualitative and Social Benefits
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Enhanced Generation Flexibility
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Increased System Robustness
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Decreased Natural Gas Risk
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Decreased Wind Generation Volatility
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Local Investment and Jobs Creation
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Carbon Reduction