On December 31, 2009, FERC conditionally approved a proposal by the Midwest Independent Transmission System Operator, Inc. (“MISO”) to revise its Generator Interconnection Procedures. Attachment X of MISO’s interconnection procedures now include two new pro forma agreements: a facilities construction agreement for a single interconnection customer (“FCA”) and a facilities construction agreement for multiple parties (“MPFCA)”.
MISO has previously modified its interconnection procedures to respond to a backlog in processing generator interconnection requests. These earlier revisions revised MISO’s procedure for processing interconnection applications from a “first come, first served” basis to a “first ready, first to proceed” approach. MISO also revised the targets that a generation project must meet in order to proceed toward interconnection. Most recently, Midwest ISO introduced temporary Generator Interconnection Agreements that conditionally permit projects that are ready to proceed to use available transmission capacity based upon the results of available studies. MISO submitted its most recent revisions under section 205 of the Federal Power Act on August 21, 2009 and supplemented these revisions on November 4, 2009.
In its proposal, MISO stated that it faced an increase in interconnection requests from wind-rich regions where there is a significant distance between load and transmission infrastructure. Interconnection of a generating facility often demanded upgrades on both the affected transmission system and a transmission system nearby.
In order to address the difficulties of an increased demand for interconnection and the need for upgrades of the transmission system, MISO proposed to streamline the process of interconnection through two pro forma facilities construction agreements. MISO modeled these agreements after construction agreements between MISO and Prairie State Generating Co., and MISO and Ameren Services Co. approved by FERC in October 2005.
The pro forma MPFCA requires interconnection customers to provide irrevocable security up front to pay for needed upgrades to transmission systems. This allows customers to join the interconnection queue without fear that they will bear the costs of upgrading a system alone. The MPFCA also contains a backfill provision that allows a new interconnection customer to replace a defaulting participant if they share comparable projects. The MPFCA also provides that if an interconnection customer withdraws from an MPFCA, and the resulting cost adjustments cause any of the remaining interconnection customers’ costs to increase by more than 25 percent, then any of the affected customers has an option to withdraw from the
MPFCA and have the unused portion of its irrevocable security refunded.
FERC’s approval of MISO’s interconnection procedures is conditioned on MISO submitting certain changes regarding withdrawal. MISO must amend its proposal so that if MISO cannot find a replacement interconnection customer for a MPFCA, it must re-evaluate the common use upgrades and notify the other interconnection customers of their new costs. FERC also told MISO to be open and consistent with their customers by integrating methodology for costs to interconnection customers in its tariff.
FERC’s order can be found on its website at www.ferc.gov under Docket No. ER09-1619.