On October 9, 2009, FERC conditionally accepted the Midwest Independent Transmission System Operator, Inc.’s (“Midwest ISO”) filing of an unexecuted amended and restated generator interconnection agreement (“IA”) among Midwest ISO, Community Wind North LLC (“Community Wind”) and Northern States Power Company (“NSP”), subject to Community Wind not having to pay for a new 230-mile transmission line. In this case, NSP is the transmission owner, and Community Wind is the transmission customer.
The new transmission line, called the Brookings County-Twin Cities 345-kV transmission line (“Brookings Line”), will connect Brookings County, South Dakota, and Eastern Minnesota. The Brookings Line is estimated to cost $700 million. Because of certain network upgrades associated with the Brookings Line, Community Wind was originally allocated 2.5 percent of the total cost of the line, equaling $15 million. The IA estimated that the total costs of the Brookings Line would be funded by a group of generation projects called the Group 5 projects, which included Community Wind.
However, Community Wind refused to execute the IA. Community Wind argued that their own 30 MW wind generation project, Project No. G586, does not need the Brookings Line for interconnection service. Additionally, Community Wind argued that the language of the IA subjected them to pay an unknown cost. As such, Community Wind concluded that the IA should not subject them to future, uncertain costs to pay for the Brookings Line.
In siding with Community Wind, FERC stated that Midwest ISO’s tariff does not allow an interconnection customer to be allocated costs of network upgrades unless that upgrade would not have occurred but for the interconnection of the generator. In other words, interconnection customers, such as Community Wind, can only be required to fund network upgrades, such as the Brookings Line, that are necessary for the customer’s interconnection. FERC found Midwest ISO failed to present any evidence that the Brookings Line would not have been built but for the interconnection of the Group 5 generation projects, including Community Wind’s Project No. G586.
While the Commission rejected Midwest ISO’s proposed cost allocation, it did so without prejudice. As a result, Midwest ISO may re-file a proposed cost allocation for the Brookings Line with new evidence to support its position. FERC’s order is available at www.ferc.gov under docket ER09-1581.