Transmission Expansion Concepts

1
Transmission Expansion Concepts

• Ameren Services
• Dennis Kramer
• July 2, 2009

2
Transmission Expansion Concepts

• Background
• Regional Expansion Criteria and Benefits I or
  RECB I for transmission needed to meet NERC
  reliability standards and new generation
  interconnections.
• Regional Expansion Criteria and Benefits II or
  RECB II for transmission that is not needed to
  meet NERC reliability standards but provides
  economic benefits to some defined set of
  stakeholders.
• Cross-Border addresses transmission cost sharing
  across the Midwest ISO/PJM seam.
• RECB III is now underway to examine all previous
  results and expand process to address new
  challenges (unintended consequences, resources
  located remote from load, value metrics, etc.)

3
Transmission Expansion Concepts

• Current State
• RECB I
• Working somewhat but remains contentious
• Disputes on consistent application of NERC
  reliability standards
• Eligibility of cost sharing issues
• On-going Midwest ISO and stakeholder efforts
• RECB II
• Few economic projects identified to date
• Yearly review of effectiveness
• Debate over metrics since stakeholders value
  different attributes
• Reduced costs (LMP, production, losses, etc.)
• Reduced environmental impact
• Increased access to renewable resources
• Filed tariff language was least objectionable
• RECB III
• Phase I to be filed
• Phase II underway
• Phase III in 2010

4
Transmission Expansion Concepts

• Problem
• Current processes are confusing and contentious
  with stakeholders concerned about cost allocation
• Recent activities (wind integration, etc) are
  driving the need for yet another round of
  meetings and another set of filings (RECB III).
• Possible Concepts to Address the RECB I Problems
• Projects required to meet NERC Reliability
  Standards would be
• Built by the TO that identified the problem
• Paid for by the TOs customers or the load to
  which they provide transmission service
• Two or more TOs could voluntarily decide to share
  project costs
• Midwest ISO reviews TO plans and suggest
  alternatives based upon regional considerations
• Strengths
• Most of existing transmission built using this
  process
• No transmission design disagreements and cost
  allocation questions
• Every TO held to same standard

5
Transmission Expansion Concepts

• Possible Concepts to Address the RECB II Problems
• The current process of TOs and Stakeholders
  proposing projects and MISO identifying
  opportunities for synergies and economies will
  continue.
• Each stakeholder determines their own value
  metrics
• Midwest ISO determines total project value using
  stakeholders metrics
• Midwest ISO publishes the estimated benefits that
  each stakeholder would receive from the project
• Stakeholders voluntarily decide whether or not to
  fund the project
• Stakeholders aware of value provided to all other
  stakeholders
• Stakeholders could form coalitions and negotiate
  funding requirements
• When project funding is complete, the project is
  placed in Appendix A of the MTEP
• Projects with less than 100 funding would be
  listed in Appendix B

6
Transmission Expansion Concepts

• Possible Concepts to Address the RECB II Problems
• Strengths
• No need to force agreement on a standard set of
  value metrics
• Arguments on project cost allocation are
  eliminated
• Increased cost recovery certainty only support
  projects that provide benefits valued by the
  stakeholder
• Weaknesses
• Free-riders Stakeholders provide no/very small
  transmission value metrics
• Possible solutions
• Stakeholder value metrics subject to regulatory
  review with project value publicly posted by
  Midwest ISO
• High probability of at least some common baseline
  metrics
• If the project provides value sufficient to the
  stakeholders to justify construction, any
  benefits provided to another entity should be
  irrelevant
• Possible Concepts for RECB III Application
• Can include external parties in the project
  benefit analysis
• Consistent process for projects except unresolved
  baseline reliability