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2019 SPP-MISO Coordinated System Plan Study Scope

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Revision History

Date Author Change Description

4/30/19 SPP & MISO Staff Initial Draft to the IPSAC 5/17/19 Stakeholder

FeedbackFinal 2019 SPP-MISO IPSAC Scope

Contents1 Overview..................................................................................................................................................3

2 Purpose of Study......................................................................................................................................3

3 Drivers......................................................................................................................................................5

4 Scope........................................................................................................................................................5

4.1 Economic Evaluation..........................................................................................................................5

4.1.1 Model Development..............................................................................................................5

4.1.2 Needs Identification...............................................................................................................6

4.1.3 Transmission Solution Development and Evaluation.............................................................6

4.2 Coordinated Reliability Assessment...................................................................................................8

4.2.1 Reliability Assessment...........................................................................................................8

4.2.2 Solution Development and Evaluation...................................................................................8

4.3 Regional Approvals............................................................................................................................8

5 Stakeholder Involvement..........................................................................................................................8

6 Communication Plan................................................................................................................................9

7 Milestones and Timeline..........................................................................................................................9

Appendix...................................................................................................................................................10

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1 OverviewThis document presents the scope and schedule of work for the 2019 SPP-MISO Coordinated System Plan (CSP) study. The CSP was formally initiated on March 11, 2019 when the JPC voted in favor of performing a 2019 CSP Study. The JPC’s decision was based upon the recommendation of the IPSAC as discussed at the February 26, 2019 Annual Issues Review meeting.

The 2019 CSP study will be the first joint study performed under the guidance of the SPP-MISO Joint Operating Agreement (JOA) enhancements filed May 17, 2019, with an anticipated approval date of July 17, 2019. A significant change to the CSP is the elimination of the joint planning model; replaced by the use of each RTO’s regional models for evaluation. This, and other changes, were the result of the 2018 JOA stakeholder effort. While the SPP-MISO JOA allows for up to 18 months to complete the study, SPP and MISO staff will utilize their respective regional planning processes and have thus committed to a completion date ahead of each RTO’s annual Board of Director approval timelines in Q4 2019.

2 Purpose of StudyThe SPP-MISO CSP study will jointly evaluate identified seams transmission issues and develop transmission solutions that efficiently address those issues for the benefit of both SPP and MISO. This study will consist of an economic evaluation and reliability assessment of seams transmission issues previously identified in the SPP and MISO regional planning processes. This will be accomplished by leveraging coordinated transmission needs identified in the SPP Integrated Transmission Planning (ITP) study (2019 ITP) and the MISO Transmission Expansion Planning (MTEP) process (2019 MTEP). The goal of this approach is to determine if any interregional transmission solutions exist that are more efficient and cost effective than what each RTO could do regionally.

The JPC, through the IPSAC, will provide stakeholders an open and transparent forum to provide input and review results during the 2019 SPP-MISO CSP study. A high-level overview of the scope of the CSP study is shown in the flow chart below:

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SPP-MISO CSP Task Flow Chart

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3 Drivers

SPP and MISO held two IPSAC meetings in the first quarter of 2019 to review issues for a potential CSP study. In the first meeting held on January 31, 2019, MISO and SPP presented the preliminary seams issues identified in their respective planning processes. The second meeting, serving as the Annual Issues Review required by the SPP-MISO JOA, was held on February 26, 2019 to discuss additional stakeholder identified issues. The JPC considered the feedback provided by the IPSAC, each RTO’s regional processes and schedules, and resource availability when developing the 2019 SPP-MISO CSP Scope.

4 Scope

4.1 Economic Evaluation

4.1.1 Model Development SPP and MISO will each rely on their respective regional models to evaluate CSP needs and project proposals, with frequent and consistent coordination throughout regional model development. A brief overview of each Region’s process and assumptions is provided below.

SPP Model Development

The 2019 SPP ITP models utilize two ITP futures, with no specific weight given to either future. For purposes of the 2019 CSP study SPP will utilize an equal weighting of these futures for determining project benefits and interregional cost allocation. The scope and futures development takes place between July and December of the year prior to the study. All the modeling assumptions used in SPP’s models were decided through SPP’s regional planning stakeholder processes. For more details on SPP’s futures development and economic planning, refer to the SPP Transmission Planning page on the SPP public website. This page is where the 2019 ITP Scope is located.

MISO Model Development

The MISO MTEP models utilize four evenly weighted futures in the economic planning process. Futures are developed through MISO stakeholder participation in Q1-Q3 of the year prior to the study, with the economic models subsequently completed in Q4. The base topology of economic models includes all MTEP18 approved projects. For more details on MISO futures development and economic planning, refer to the MISO Transmission Planning page on the MISO public website.

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4.1.2 Needs IdentificationSPP and MISO, using their regional processes, rely on a number of data sources to determine the subset of needs along the seam to be emphasized in the CSP. These sources include congestion analysis on future models, historical congestion data, stakeholder recommended issues, and issues identified in previous CSP study efforts. Once target areas are identified, both RTOs use similar analytics to identify and rank flowgates based on the level of economic potential. SPP and MISO then coordinate these needs to provide transparency and a “picture” of overall needs along the seam to the IPSAC and other stakeholders. The preliminary issues identified as a part of the 2019 CSP are located in the Appendix below.

4.1.3 Transmission Solution Development and Evaluation

The set of needs identified in the SPP and MISO regional processes will guide the development of transmission solution ideas to be evaluated as SPP-MISO interregional projects.

Transmission Solution Development

Each respective RTO staff and stakeholders will be able to propose transmission solutions to address the identified transmission issues. Solutions will be solicited through the SPP-MISO IPSAC meetings and through each RTO’s regional planning process. SPP and MISO will exchange regional and interregional solution ideas throughout the evaluation process. Solutions submitted through the IPSAC or one party’s regional process do not need to be resubmitted in another forum unless the submitter is seeking to qualify for participation credits or incentive points for the RTO’s regional competitive transmission process.

Transmission Solution Evaluation

A preliminary screening analysis will be performed on the proposed transmission solutions to select and determine which proposed solutions provide potential benefit and should be considered for further, more detailed evaluation. The proposed transmission solutions will be reviewed for duplicate and/or similar projects and consolidated. All consolidated transmission solution ideas and all transmission solution ideas that have potential value will be evaluated for adjusted production cost and benefits to SPP and MISO. Benefits will be calculated by the change in adjusted production cost with and without the proposed interregional project.

The benefit metric shall be calculated for each RTO for each simulated year. Benefits for intermediate years between simulated years will be based on interpolation. Benefits for years beyond the last simulated year will be based on extrapolation. The total project benefit shall be determined by

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calculating the present value of annual benefits for the first 20 years of project life after the projected in-service date.

Each RTO will use their respective regional evaluation process to calculate benefits. The key assumptions from each regional process are described below:

MISO The benefit metric will be calculated for the simulated years, 2023, 2028 and 2033. The annual costs will be calculated using an average carrying cost of existing Transmission

Owners in MISO The present value calculation will assume a discount rate using a plant weighted average for all

TOs in MISO MISO regional weighted B/C must be 1.25 or greater

SPP The benefit metric will be calculated for the simulated years 2024 and 2029. The annual costs is estimated using an average carrying cost of existing Transmission Owners in

SPP The present value calculation will assume an estimated discount rate and an estimated plant

weighted average based on SPP’s existing Transmission Owners SPP regional B/C must be at least a .90 1yr B/C or a 1.0 40yr B/C

Solutions may also consider reliability and public policy benefits, in accordance with section 9.6.3.1.1 of the SPP-MISO JOA.

Interregional projects identified to address congestion will be evaluated to ensure they do not create new reliability issues. The evaluation may result in the modification of the interregional project or identification of additional interregional facilities that are needed to mitigate the projected reliability issue. Solutions will also go through robustness/sensitivity testing within each regional planning process, to ensure no single assumption is the driver for project benefits.

Solutions submitted into the process and not selected to move forward in the study or for interregional cost allocation will be reported to stakeholders.

Interregional Cost Allocation

SPP and MISO will use adjusted production cost benefits (as calculated using the respective regional methodologies) to allocate the costs of proposed interregional projects to each planning region. SPP and MISO will utilize the futures weightings referenced in section 4.1.1 of this study scope for the final determination of 20yr benefits. Project benefits may also include the avoided cost of reliability projects or public policy projects, in accordance with the SPP-MISO JOA section 9.6.3.1.1.

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4.2 Coordinated Reliability AssessmentSPP and MISO have agreed to review each respective RTO’s regional plans to determine if there are potential reliability projects which would mutually benefit both SPP and MISO.

4.2.1 Reliability AssessmentSPP and MISO will review reliability issues identified in the respective regional planning processes of SPP and MISO that are located near the seam to determine if they could potentially benefit from an interregional project. Any SPP or MISO regional needs identified by SPP and MISO staff as potentially benefitting from an interregional project will be made available to stakeholders for solution development.

4.2.2 Solution Development and EvaluationSolutions to address identified reliability issues will be developed and reviewed in coordination with the respective regional planning processes. These solutions, which may include alternative projects that more effectively mitigate identified issues, may be submitted by:

1. Respective RTO staff2. Stakeholders through regional planning processes3. Stakeholders through MISO-SPP IPSAC meetings

Transmission solutions to address identified reliability issues will be evaluated to determine the most efficient and cost-effective method to address the identified constraints. These projects may also be evaluated for economic benefits to SPP and MISO.

Interregional Cost Allocation

Solutions that primarily address reliability issues will use avoided cost plus adjusted production cost to allocate costs to each planning region, in accordance with section 9.6.3.1.1 of the SPP-MISO JOA. The RTO-share of proposed projects will be allocated regionally in accordance with their respective OATT provisions.

4.3 Regional Approvals

At the completion of the 2019 SPP-MISO CSP study there may be identified SPP-MISO interregional projects that the JPC recommends to the respective RTO’s regional process for approval by each respective Board of Directors. The results of the 2019 SPP-MISO CSP Study will be memorialized in a report on which stakeholders will have an opportunity to review and provide comments.

5 Stakeholder Involvement

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The JPC will use the IPSAC to review and gather input on the SPP-MISO CSP Study. The IPSAC will meet throughout the study as needed to review and provide input. Key milestones for IPSAC meetings include:

i. Identification of transmission needs determined from regional processes;ii. Review proposed transmission solution ideas and alternatives;

iii. Recommendation on transmission solutions; and Finalization of CSP report

The JPC will provide appropriate notice to stakeholders through the respective RTO websites of the dates and times of IPSAC meetings. All meeting materials will be maintained on each RTO’s IPSAC webpage.

6 Communication Plan

Materials will be posted in advance of each IPSAC meeting on each RTO’s respective webpage for IPSAC meetings. For email communication, SPP and MISO will use their applicable regional email lists. SPP will utilize the Seams Steering Committee (SSC) Exploder as the primary method of communication with stakeholders. MISO will utilize the MISO Planning list as the primary method of communication with stakeholders.

7 Milestones and TimelineSPP-MISO CSP Tasks

1. Develop and finalize scope document for CSP study – April 20192. Develop detailed schedule for CSP study – May 20193. Project Evaluation

Model Development – November/December 2018 Determine CSP needs – January/February 2019 Solution Development – February through May 2019 Solution Evaluation and Robustness Testing – June 2019 Reliability No Harm Analysis – July 2019 Determine interregional cost allocation - July/August 2019

4. IPSAC and JPC Recommendation – September 20195. Regional Approvals

SPP: MOPC & Board Approval – October 2019 MISO: PAC & Board Approval – December 2019

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AppendixPreliminary issues on or near the seam SPP-MISO seam identified in the ITP and MISO regional planning process, as presented at the January 31, 2019 SPP-MISO IPSAC meeting.

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