On May 23, 2013, FERC approved revisions to the Midcontinent (previously Midwest) Independent System Operator, Inc.’s (“MISO”) Agreement of Transmission Facilities Owners to Organize the Midwest Independent Transmission System Operator, Inc. (“Transmission Owners Agreement”) that grant increased authority to state regulators.  The revisions allow for the Organization of MISO States (“OMS”) – a regional state committee comprised of state, city, and local regulatory officials within MISO’s footprint – to have enhanced authority in determining transmission cost allocation methodologies, by requesting that MISO make a filing pursuant to Section 205 of the Federal Power Act (“FPA”).

In 2011, the Arkansas Public Service Commission accepted Entergy Arkansas’ application to transfer control of its transmission facilities to MISO.  A condition of the acceptance was that MISO grant the OMS section 205 filing authority in certain regulatory instances. Under the current Transmission Owners Agreement, only MISO and the individual MISO Transmission Owners have the authority to submit section 205 filings addressing transmission cost allocation and new facilities that affect multiple tariff zones.  However, under the revised Transmission Owners Agreement, the OMS can request that MISO file an amendment or establish a regional cost allocation methodology, provided that MISO first submits a section 205 filing to amend an existing methodology.  Additionally, the OMS may request a MISO methodology or tariff change through the stakeholder process.  If after conducting the stakeholder process, MISO decides to change an existing methodology, and the OMS disagrees with the change, MISO will submit the OMS’s alternative language and any supporting documentation to FERC.  In the alternative, if MISO determines not file any methodology changes, MISO will provide written documentation to OMS explaining the reasoning.

In accepting the proposal, FERC noted that it has previously granted state regulatory officials section 205 filing rights.  FERC stated that granting such authority “can facilitate state consensus on certain regional issues, as well as a partnership between [FERC] and state commissions.”  FERC also noted that granting OMS enhanced authority does not diminish customers or other stakeholders’ ability to present their own views in the stakeholder process.  Finally, FERC accepted the proposed revisions effective upon the integration of Entergy Arkansas into MISO.

A copy of the order is available here.