SPP, MISO Reach Transmission Usage Agreement

Nick Brown, Southwest Power Pool Inc.'s president and chief executive officer.

Southwest Power Pool announced Tuesday that it had reached a deal with MISO to ensure compensation for use of the SPP system.

SPP and the Midcontinent Independent System Operator, or MISO, are regional transmission organizations serving multiple states. SPP is headquartered in Little Rock. MISO, based in Carmel, Indiana, houses its South Central Operations Center in Little Rock. Entergy Arkansas Inc. is a MISO member. 

SPP spokesman David Avery said the agreement is pending Federal Energy Regulatory Commission approval and simply establishes terms of compensation for use of the SPP transmission system by MISO going back to January 2014.

The settlement agreement includes joint parties to SPP: the Southern Company of North Little Rock; the Tennessee Valley Authority; Associated Electric Cooperative of Springfield, Missouri; Louisville (Kentucky) Gas and Electric; Kentucky Utilities Co.; and PowerSouth Energy Cooperative of Montgomery, Alabama.

If approved by FERC, the agreement provides the governance for continued shared use of the transmission system where it enables more economical delivery of energy, while also providing compensation for that use, according to an SPP news release. 

“As the SPP region grows and we continue to modernize the electric grid, cooperation with our neighboring regions has never been more important,” SPP President and CEO Nick Brown said in the news release. “I am pleased we were able to reach this agreement with MISO to ensure that our member companies and their customers are compensated for the use of the SPP transmission system. We also appreciate the work and support of the joint parties in helping us resolve this challenging and complex issue.”

SPP said Tuesday’s FERC filing contains several key provisions of agreement:

• Specifically creates a mechanism where MISO will compensate SPP and the joint parties for use of their systems. The level of compensation will be determined by the application of a capacity factor for flows above MISO’s existing 1,000 megawatts (MWs) of contract path.
• Generally retains the capacity usage provision between MISO and SPP under their Joint Operating Agreement and establishes new provisions for certain usage going forward.
• Provides certainty for express operational transfer limits.
• Establishes an operating committee for all parties to manage issues that arise under the agreement.
• Upon the settlement agreement becoming effective, MISO’s hurdle rate is removed.

“We are pleased to have reached a resolution that provides electricity savings to consumers across the MISO region and brings clarity to our members and all stakeholders,” said MISO President and CEO John R. Bear. “With the issue of capacity sharing behind us, we can now collectively return our full attention to the significant challenges facing the industry.”