Win-wins are key to securing interregional transmission buy-in: experts

• Multistate transmission collaboration is a complex negotiation, particularly when it comes to the issue of cost allocation. Shared incentives, along with a united vision for the future, are key tools for driving the process, said speakers on a Tuesday American Council on Renewable Energy webinar.
• Cost allocation for these projects is “one of the hardest things to agree on, if not the hardest,” said Anya Poplavska, a senior policy advocate at the Acadia Center. “I don't think it's a stretch to say that this is a huge limitation and reason that interregional projects just don't get pursued as much.”
• But Abe Silverman, an assistant research scholar with Johns Hopkins University’s Ralph O’Connor Sustainable Energy Institute, said cost allocation is “a bit of a red herring … What we really need to talk about is benefits allocation.”

Silverman said that fellow webinar participant Beth Soholt, executive director of the Clean Grid Alliance, led the group in a strategy of being “really clear about the benefits” when they were advocating for the Midcontinent Independent System Operator’s multi-value projects, portfolios of cost-shared regional transmission solutions.

MISO is facing a complaint filed last month by five state utility commissions who want the Federal Energy Regulatory Commission to change the classification of one of those portfolios to make it ineligible for cost-sharing. The commissions allege that MISO used flawed modeling to calculate the potential benefits, which they say are significantly less than the portfolio’s costs.

Silverman is facilitating the Northeast States Collaborative on Interregional Transmission, which in June issued a request for information seeking to identify candidate projects “that would increase interregional transfer capability across one or more ISO interfaces, so either between PJM and New York, or between New York and ISO New England,” the RFI says. Responses are due Oct. 23.

“One of the things that we're trying to do with this RFI initiative in particular is to identify candidate projects so that we can come in and say, here are the benefits to consumers,” Silverman said. “And when we go to the governors of these various states, it is a very different conversation if we go in and say, ‘We have a billion dollars of benefits that we want to allocate between three states,’ versus ‘We have $500 million of costs that we need to allocate.’”

The RFI is focused on “the low-hanging fruit of things that we can do — win-win kinds of situations,” Silverman said.

Soholt was an early supporter of CapX2020, an initiative among 11 Midwestern utilities that built 800 miles of high-voltage transmission across Minnesota, North Dakota, South Dakota and Wisconsin. She said that while some lessons from the initiative’s success might be applicable to other projects, the strong shared vision behind CapX2020 was key to driving it forward.

“This can absolutely be replicated in the South, but you need willing participants,” she said. “Right now, a lot of what we see from MISO South is protectionism of their kind of incumbent generation, and they don't want any competition. They don't want interregional transmission. They are interested, I think, in some resources — renewables from other areas — because there might be more cost-effective renewables that they can get than [ones] they can develop in their own footprint.”

The CapX2020 project involved “a ton of public engagement,” Soholt said. “And these are very complex projects. It involved regulatory processes, a huge amount of logistics for ordering supplies and getting the engineers and doing the field work. And it was very financially complex. The complexity there was greater than any one of the utilities had ever taken on.”

But the collaboration that brought the project to fruition was “a coalition of the willing,” she said. “When they were looking out into the future, they could find something in it for each one of the utilities because they all saw somewhat of a common vision.”

Poplavska noted that there are opportunities for more regional collaboration between the Northeastern states and Canada, thanks not only to geography but also to mutually ambitious carbon-reduction goals. In July, Nova Scotia designated four offshore areas for future offshore wind development, and it’s exploring the idea of exporting some of that power to New England, CBC News reported. The move comes as President Donald Trump is working to limit U.S. offshore wind development.

“Given what's going on at the federal level with us right now ... Obviously, that's massive,” Poplavska said. “We need to take advantage of the opportunities that we have cross-border in light of domestic limitations.”