The two grid operators that supply power to the US Midwest are proposing to build $1.7 billion worth of new transmission lines to bridge the “seam” between their grids. The move could unlock vast amounts of clean power and potentially serve as a template other parts of the country could follow to build more of the power lines the US needs to meet its clean energy goals.
Last week the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP) plans submitted with the Federal Energy Regulatory Commission (FERC) seeking permission to undertake what SPP’s filing describes as “an unprecedented, innovative and proactive collaboration” between the two grid operators.
The so-called Joint directed interconnect queue (JTIQ) process is in the works since 2020when MISO and SPP pledged to team up to identify transmission projects that could bring value to customers along the border separating the two network operators’ territories.
That border stretches from Canada to Louisiana and passes through the Great Plains, the most productive part of the country for generating wind power, as well as the target for an increasing number of solar farms.
But many of those projects languish in the long interconnection process. The five new joint transmission projects proposed as part of JTIQ, which will connect the two grid systems across the part of their border highlighted in yellow on the map below, could help facilitate interconnection for 28 to 53 gigawatts of projects in the region is planned, according to s joint presentation of the two network operators.
This gap in cross-border transmission capacity is a known problem. And multiple studies conducted by grid operators, government agencies, universities and independent analysts have shown that the cost of building new power lines to close that gap will be more than paid for by their long-term value to the grid: namely their ability to reduce congestion and enable more cheap, clean energy to come online.
Despite their clear advantages, interregional transmission projects have struggled to get off the ground in recent years. MISO, SPP and the Electricity Reliability Council of Texas, that state’s grid operator, undertook a series of collaborative grid expansion projects in the 2000s and early 2010s. But since then, large-scale network expansion has slowed dramatically. The gaps have been filled by smaller-scale upgrades and expansions within utility territories — a simpler but much more expensive way to build the grid, and one that benefits individual utilities more than ratepayers or the overall power system.
To overcome the “triple hurdle” of interregional transmission planning
Things quickly get complicated for proposed transmission lines that span multiple network operators. That’s because those projects must navigate what energy analysts call the “triple hurdle” of interregional grid planning.
The first two hurdles involve clearing the complex negotiations between grid planners, transmission-owning utilities, state regulators and other stakeholders over costs and benefits within each separate grid operator. The third hurdle is to undertake an even more difficult negotiation for coordinated transmission planning and cost sharing between those two network operators.
MISO and SPP’s new JTIQ rate structure represents a significant breakthrough in bringing together those separate processes into a unified approach, said Theodore Paradisean energy, infrastructure and resources partner at law firm K&L Gates.
The two grid operators “began to identify coordinated transmission efforts that could interconnect more generation and do so in a more cost-effective manner than efforts by either grid operator acting alone,” he said in an email to Canary Media wrote.
That’s not to say the structure MISO and SPP have created is ideal, said Rob Gramlich, president of consultancy Grid Strategies. He noted that the five transmission projects proposed in this first round are subpar compared to what is not only possible, but necessary to get more cheap, clean energy built.
This first round of projects also does not yet take on the challenge of asking the utilities within each network operator to pay part of the cost of the proposed network projects, Gramlich said in an email to Canary Media. Instead, as the SPP filing with FERC notes, energy project developers “will have cost responsibility for JTIQ upgrades in the SPP and/or MISO footprints.”
“Many generators are concerned that loads in both areas benefit from this transmission, but they don’t share in the cost,” Gramlich said. “It is not a model for future interregional planning efforts.”
Preparing the pump for interregional transmission planning
In fact, it is likely that plans for this first round of projects would not have been able to move forward if not for the contribution of hundreds of millions of dollars from the federal government, Gramlich said, reducing the share of costs that project developers have. must take on.
In October 2023, DOE issued $3.5 billion in grid grants to projects across the country. One of the biggest single awards was for $464 million to the Minnesota Department of Commerce to help boost the JTIQ work, backed by the promise of $1.3 billion in cost-sharing contributions from participants.
“The DOE money was critical in getting to this point,” Gramlich said. “More DOE actions like this in more areas could help stimulate the type of large interregional transfer we need.”
Studies from the US Department of Energythe Massachusetts Institute of Technologyand Princeton University showed the benefits of building more transmission lines connecting distant regions of the country. These include easing congestion costs caused by bottlenecks that prevent cheaper wind and solar power from coming online and reducing the risk of blackouts by sharing power between regions that tend to experience different weather.
Long distance transmission is also key to solving the climate crisis by expanding the capacity to build more clean power. Across the country, wait times for projects that will add thousands of gigawatts to the grid now average from three and a half years or longeraccording to data from the US Department of Energy’s Lawrence Berkeley National Laboratory.
According to MISO and SPPs joint presentationdevelopers aim to connect about 350 gigawatts of energy to MISO’s grid, and 84 gigawatts to SPPs – almost all of these proposed power plants are wind, solar and battery installations. But LBNL data indicate that many more projects have been withdrawn from MISO and SPP’s queues than have been successfully connected in the past few years.
Even if interconnection projects are approved, they often have to pay millions of dollars in grid upgrade costs to enable their power to flow over overburdened US transmission grids.
FERC this year issued a regional dispatch order which requires network operators and utilities to examine long-distance network planning with these benefits in mind. Regional transmission expansions, such as MISO’s multibillion-dollar long-distance transmission planis now starting to happen after a decade of little action.
But JITQ is outpacing FERC on interregional transmission policy so far, noted K&L Gates’ Paradise. In fact, “the practical solution exploration moved forward in a space where the rules that allowed it had yet to be approved,” he wrote.
Other network operators are beginning to explore interregional planning. Earlier this year, MISO and PJM, the grid operator that manages planning and energy markets for a region that includes 13 states from Illinois to Virginia as well as Washington DC, launched a process intended to “engage in joint transmission analysis and coordinated modeling” for their joint needs.
Much work still needs to be done before MISO and SPP’s JTIQ plans can bear fruit. First, FERC must review and approve proposed changes to the two grid operators’ rates — the industry term for the rules by which transmission networks and the energy markets that enable them comply with all federal regulations. If that happens by the November 2024 timeline the two network operators have called for, it will be followed by years of work to site, permit and actually build the five new lines.
But as a first-of-its-kind process, JTIQ could help lay the groundwork for more such interregional efforts in the coming years, Grid Strategies’ Gramlich said. “At least planners in both areas have agreed on models, methods, a configuration, and now a plan for cost allocation,” he said. “We need a lot more of that work at a lot more regional planning organizations.”
