Midcontinent Independent System Operator, Inc., ER22-995
Yesterday, the Commission approved a significant transmission planning order regarding cost allocation of Multi-Value Projects in the MISO region. The decision was not particularly groundbreaking in a legal sense as it is a relatively straightforward application of Commission regulations and precedent. It is noteworthy, however, insofar as it sets the stage for significant transmission investments that could deliver enormous benefits to MISO customers. It also demonstrates the opportunity for regions across the country to engage with states in developing workable cost allocation approaches.
Formula Rate Items: E-10 through E-13
Over the last couple of months, the Commission has issued ten show cause orders to transmission owners based on concerns around their formula rate processes. These orders shed light on an important issue that I am glad the Commission has addressed: transmission cost formulas and inputs should be transparent and accessible by customers. This reminder is especially important in the context of this ongoing conversation about regional transmission investment and cost management. It just so happens we are holding a technical conference on that topic in October, and this is a reminder that the deadline for nominations to participate as a panelist is coming up on June 16.
Certificate Items: C-1, C-2, and C-4
In C-1 and C-2, I am concurring in orders issuing certificates of public convenience and necessity for natural gas pipeline facilities. These orders illustrate to me why the Commission must make it a priority to finalize updated policies for considering the need and impact of proposed new natural gas infrastructure.
In both orders, the Commission declines to determine the significance of the project’s greenhouse gas emissions pending finalization of our draft greenhouse gas (GHG) Policy Statement. I have agreed it is appropriate to do so where there are potentially significant GHG emissions, so we do not prejudge whether to set a significance threshold or at what level to set it. However, in C-1, where we issue a certificate for Kern River’s Delta Lateral Project, the Commission’s reticence is unjustified. As pointed out in my joint concurrence with Chairman Glick, under any framework the Commission might ultimately adopt for determining significance, the GHG emissions associated with the Delta Lateral Project would certainly be deemed insignificant, as they are a net reduction.
In C-4, we issue a certificate to Spire Storage West for its Clear Creek Expansion Project, which will greatly expand Spire’s existing natural gas storage ability. In our joint concurrence, Chairman Glick, Commissioner Philips, and I explain that we are issuing the certificate consistent with the precedents developed under the 1999 Certificate Policy Statement.
But as a matter of policy, I believe that the Commission should call for stronger evidence that a project is needed and will be built. This is particularly true in instances like this one where there is a heightened risk that the project sponsor will use eminent domain to acquire the property rights necessary for construction and operation.
Most of you know we are now awaiting comments more broadly on the issues of pipeline need and GHG evaluation related to pipeline certifications for all project types, including storage and interstate pipelines. I look forward to those comments and hope my colleagues will come together to expeditiously issue a final Certificate Policy Statement.
A-3 (Summer Energy and Market Reliability Assessment)
Thank you, Chairman, and Gilbert, Eric, Oscar, and Mark for the presentation.
There are no longer shoulder months where we can take a deep breath and allow for regular scheduled maintenance for next season’s challenges. This is now a yearly cycle and we are always bracing for extreme weather without the time to catch our breaths.
In trying to understand first-hand the priority concerns for this summer, I met with CAISO and MISO representatives who are proactively working on ways—not only within their jurisdiction, but with their neighboring systems—to talk about contingency plans and coordination should the eventualities discussed within the report come to bear. It is important that we do not think of any state or region as an island unto itself in this conversation.
We also need to build on ongoing efforts to address seasonal readiness in a way that cuts through this season-by-season approach. A good amount of the policy required to do that lies outside of this Commission’s jurisdiction. But an important responsibility is within this Commission, and I think extreme weather implicates both specific resource issues—like the variance we issue in H-3 today related to a hydropower facility’s concerns with low snowpack and drought-induced conditions—as well as a broader set of issues involving resource adequacy, system planning, and market design.
I am certainly pleased on this front by the Chairman’s announcement that we are moving forward with a Northeast gas-electric reliability forum, which is a chance to have states in the region in the same room and allow for coordinated consideration of all tools across jurisdictions. The responsibility is not with any state alone and I do not believe it is with the Commission alone. I for one think we are smart enough to embrace technology neutrality and to embrace how the markets are driving the resources that are coming online, while also facilitating reliability and cost-effectiveness. I look forward to continuing to work on these matters.