On June 21, 2018, FERC found that the Midcontinent Independent System Operator, Inc.’s (“MISO”) Open Access Transmission Tariff (“Tariff”) provisions governing the termination of generator interconnection agreements (“GIAs”) were unjust and unreasonable due to an inconsistency between the terms of the GIA contained in the Tariff and the MISO Generator Interconnection Procedures (“GIP”). FERC also accepted, after a paper hearing, MISO’s proposed revisions to the GIA and GIP termination provisions, subject to further revisions. MISO’s Tariff revisions clarified that an interconnection customer could extend its commercial operating date (“COD”) for up to three years without risking termination from MISO, which FERC found, subject to modification, just and reasonable.
On December 4, 2015, MISO filed to terminate the GIA of the Merricourt Power Partners, LLC (“Merricourt”) because it never achieved commercial operation three years after its initially projected December 1, 2012 COD. On March 4, 2016, FERC accepted MISO’s filing because a certain section of its GIP “expressly precludes an extension of Merricourt’s COD beyond three years of the original COD.” FERC denied Merricourt’s rehearing request on October 19, 2017 (the “October 19 Order”), but also stated that “it appeared that certain interconnection termination provisions in MISO’s Tariff may conflict.” In addition, FERC explained that if an interconnection customer can extend its COD by up to three years without risking termination under the GIA, then there must be a conflict with MISO’s GIP, which stipulated that any extension would be a material modification and result in the interconnection customer being withdrawn from the queue. To resolve the inconsistency between MISO’s GIA and GIP, FERC instituted a paper hearing proceeding.
Following the issuance of the October 19 Order, MISO proposed to revise its GIP and GIA in line with the Commission’s preliminary findings from that order. In the GIP, MISO proposed to add language that referenced the GIA and also made it mandatory that MISO would seek to terminate a GIA if the three-year period following the COD lapsed without achieving commercial operation. In addition, MISO added one exception to this three-year mandatory termination provision, which provided that MISO would not seek to terminate an interconnection customer’s GIA if that customer’s interconnection request is served by a contingent network upgrade with an in-service date farther out than the COD. MISO also revised its GIA to note the limited circumstances in which it will not seek to terminate a GIA if the interconnection request is served by a contingent network upgrade. Finally, MISO proposed language in its GIA to explicitly reference the GIP, which it claimed would remove any ambiguity that the COD is to be established in accordance with the GIP.
FERC’s most recent order concluded that, due to the inconsistency between MISO’s GIA and GIP, these provisions were unjust and unreasonable. Regarding MISO’s proposed revisions to address this inconsistency, FERC determined that, with some modifications, MISO’s proposed revisions were just and reasonable. FERC reasoned that MISO’s insertion of language to explicitly reference the GIP within the GIA is an “acceptable alternative” because “the GIP and the GIA are intended to work together,” so “referring to the correct section of the GIP…is preferable to separating the two documents entirely.” However, FERC stated that MISO’s proposed Tariff revisions did not make clear that MISO may not terminate an interconnection customer’s GIA until three years following the failure to achieve commercial operation. As a result, FERC required MISO to add additional clarifying language to that effect. FERC also ordered MISO to include language in the GIA that an interconnection customer’s GIA will be terminated in accordance with the MISO’s GIP, including any extension provided therein. Finally, FERC found just and reasonable MISO’s proposed exception to not terminate GIAs if the failure to achieve COD within three years was due to a contingent network facility not being in service.
FERC ordered MISO to submit additional revisions in a compliance filing by July 21, 2018. FERC’s order can be found here.