Southwest grid defends MISO transmission fees

OREANDA-NEWS. February 20, 2015. The Southwest Power Pool is asking federal regulators not to reconsider their decisions in the squabble over \\$50mn in unpaid bills for use of the pool's transmission system by its neighbor, the Midcontinent Independent System Operator (MISO), despite protests from states, the midcontinent grid operator and its market monitor.

The dispute began when Entergy and other utilities in Arkansas, Louisiana, Texas and Mississippi joined MISO in late 2013. Power flows in excess of the 1,000MW physical limit between the MISO regions have to use the southwest grid's transmission lines. MISO had expected to schedule such flows under legacy agreements; the southwest grid decided that those flows have to incur additional charges.

The Federal Energy Regulatory Commission (FERC) in March 2014 ordered confidential talks between the two grids and in December 2014 ordered MISO to recalculate a temporary surcharge, called the "hurdle rate," which MISO implemented to offset a growing transmission tab from the southwest pool for constraints caused by power flowing between MISO's midwest territory and its Gulf coast region.

Potomac Economics, the independent MISO market monitor, last month joined a chorus of comment from MISO and state regulators, asking for a rehearing of FERC orders.

The southwest pool said yesterday FERC should reject the market monitor's motion for procedural reasons, saying the plea to revisit orders issued in March and December 2014 was not made in a timely manner and offered "no new facts or principles of law that warrant reconsideration."

The dispute over power flows has contributed to price separation between two MISO segments. The market monitor said price distortion will be magnified under FERC's modified hurdle rate and "will exacerbate the problems it is intended to address."

The MISO monitor also asked FERC to terminate confidential talks, which both sides have described as productive.

MISO president John Bear told an industry group in New Orleans this month that a settlement could be reached by this summer.