Dive Brief:

• The Southwest Power Pool (SPP) and the Midcontinent Independent System Operator (MISO) have identified seven possible transmission projects across their joint border that could allow up to 53 GW of potential generating capacity to interconnect with the grid.

• The transmission projects, costing about $1.8 billion, would relieve transmission constraints that are preventing wind, solar and other potential projects along the grid operators’ seam from being able to come online, according to a draft study released last week by the grid operators.

• The "first-of-its-kind" study could become a model for transmission planning, according to Natalie McIntire, a technical and policy consultant for Clean Grid Alliance, a renewable energy advocacy group. "It tried to look for least-cost solutions that brought benefits to solve a wide set of transmission issues," McIntire said.

Dive Insight:

The SPP-MISO initiative grew out of a problem plaguing grid operators around the country: interconnection queues that are clogged with hundreds of requests from companies seeking to connect new generation sources to the grid.

It is increasingly difficult to interconnect such generation – mostly low-cost renewables in areas far from customer load centers – along the border between SPP and MISO that runs roughly from western Minnesota to northwestern Louisiana, according to the draft study, released Jan. 27.

In response, SPP and MISO launched the Joint Targeted Interconnection Queue study in 2020 to see if new transmission could relieve grid congestion to allow potential wind farms and other generating resources to come online.

The study took a novel approach of considering whether the transmission needed to unlock the generation interconnection queues could also provide economic and reliability benefits to transmission customers, SPP and MISO said in the draft study.

The grid operators estimate that their recommended portfolio of 345-kV projects would deliver $724.2 million and $246.7 million of "adjusted production cost" savings to customers in the MISO and SPP footprints, respectively, producing a 0.56 benefit-to-cost ratio, indicating the electricity cost savings would make up about half the cost of the projects.

In separate analysis, SPP found the seven transmission projects could allow for up to 53 GW of generation interconnection in an area around the SPP-MISO border while the Midcontinent grid operator estimated the transmission would facilitate 28 GW in the same area, Andy Witmeier, MISO director of resource utilization, said in an interview Wednesday. MISO used more conservative assumptions in its analysis compared with SPP, Witmeier said.

The potential transmission projects are in North Dakota, South Dakota, Minnesota, Missouri, Nebraska and Kansas, states rich in wind potential.

The grid operators expect to release a final report by Feb. 10.

In a related process, SPP and MISO are working with stakeholders to develop a methodology for allocating the costs of the transmission projects between generators and electricity users. 

SPP and MISO expect to file a cost allocation methodology for Federal Energy Regulatory Commission review late this year, according to Witmeier. Once it is approved, the grid operators’ boards would review the projects for approval, possibly early next year, Witmeier said.

Overall, the initiative is "groundbreaking" and could be a model for transmission development elsewhere, according to McIntire, who works on transmission issues for Clean Grid Alliance, which has members that include companies such as Pattern Energy, Google and EDF Renewable Energy.

Typically, transmission planning studies look at one issue, such as reliability, reducing congestion or generator interconnection, McIntire said.

"I have never seen a study like this where two RTOs have come together to evaluate what transmission solutions can bring broad benefits to load and at the same time can help to enable new generation interconnection near the seam," McIntire said.

Increasingly, when generators seek to interconnect in one RTO, "affected system" studies show that major transmission upgrades are required in other grid operator footprints, McIntire said, noting the phenomenon is occurring along the MISO-PJM Interconnection seam.

Those required upgrades "pretty clearly bring broader benefits than just interconnecting those new generators," McIntire said.

The cost allocation portion of the initiative is also charting new territory, according to McIntire.

"We don't have a cost allocation methodology in place that allows for that kind of sharing that says we have two really different types of beneficiaries that then should share in the cost of these upgrades," McIntire said.

SPP and MISO may also consider other grid benefits beyond cost savings in determining how to dole out the expense of building the transmission projects, McIntire said, noting the transmission lines would also provide reliability benefits.

"I do hope that [the SPP-MISO process] becomes a model or an example for what can be done," McIntire said. "This may be just the first of many studies that MISO and SPP take up along their seams like this."

An SPP official wasn't available to talk about the draft study by press time and a MISO spokesman responded to questions by referencing a presentation on the study.